Uber forecasts profit below estimates on cheaper rides and higher taxes

Uber Technologies forecast first-quarter profit below Wall Street expectations, citing higher taxes and a strategic push toward cheaper ride options designed to boost bookings. The outlook sent Uber shares sharply lower in premarket trading, as investors reacted to weaker earnings guidance despite strong demand.

Uber said it expects an adjusted effective tax rate of 22% to 25% this year, reflecting its operations across more than 70 countries. At the same time, the company has expanded lower-cost mobility products such as shared rides, which helped trips rise 22% in the fourth quarter but weighed on near-term margins.

The company projected first-quarter adjusted earnings per share of 65 to 72 cents, below analyst expectations, while gross bookings are forecast to exceed estimates. Uber said it is deliberately moderating margin expansion after proving its ability to generate profits, prioritising affordability to drive growth.

Uber also announced a chief financial officer transition and highlighted accounting changes in the UK that will reduce reported margins without affecting underlying profitability. Management said improving pricing conditions and lower insurance costs should support growth later in the year.