Booking growth, a key measure of ridership for online taxi operators, slowed to a more than a year low in the third quarter and missed analysts’ forecasts.
“If near-term growth investors want more growth, like acceleration, and they don’t get it, they’re going to be disappointed,” said Adam Ballantine, senior analyst at Cambiar Investors, which owns Uber stock.
Shares of rival Lyft, which is set to report quarterly results next week, fell 2.4%.
An uncertain economy and high inflation weighed on Uber’s outlook for passengers in recent quarters, weighing on weak demand in the ride-hailing industry.
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“It is likely that there has been a slight shift towards cheaper modes of transport,” said Susannah Streeter, head of finance and markets at Hargreaves Lansdowne.
Uber, the dominant player in the North American ride-sharing market, sees suburbs as the next growth driver in the US and elsewhere amid concerns about market saturation.
“It’s a common misconception that almost everyone already uses Uber,” CEO Dara Khosrowshahi said in his prepared remarks.
He said the company plans to capture suburban markets through a better pricing strategy for long distances and by focusing on features that allow people to wait and reserve rides in these areas.
Total bookings for Uber’s mobility business grew 26.4%, with user engagement reaching an all-time high. Overall revenue in the third quarter came in at $11.19 billion, beating analysts’ average estimate of $10.98 billion.
Net income attributable to Uber was $2.61 billion in the third quarter, including a $1.7 billion pre-tax gain related to the company’s equity investments, while operating profit was a record $1.06 billion.
Adjusted earnings before interest, taxes, depreciation and amortization — a closely watched profitability metric — came in at $1.69 billion, compared with expectations of $1.64 billion.
The company forecast fourth-quarter adjusted EBITDA between $1.78 billion and $1.88 billion, versus expectations of $1.84 billion.
(Reporting by Akash Sriram in Bengaluru; Editing by Soumyadev Chakraborty and Arun Koyur)
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