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Uber Shares Drop 8% as Legal Costs Undercut Profit and Holiday Outlook Disappoints

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Uber’s shares fell 8% on Tuesday after the company reported weaker-than-expected operating profit and issued a cautious outlook for the upcoming holiday quarter. The setback overshadowed otherwise strong growth in both its rides and delivery businesses, which continue to benefit from rising demand and its Uber One membership program.

The ride-hailing giant posted an operating income of $1.11 billion for the third quarter, below analyst expectations of $1.61 billion, according to Visible Alpha. Uber attributed the shortfall to legal and regulatory expenses but did not disclose details. Its guidance for adjusted profit in the fourth quarter — between $2.41 billion and $2.51 billion — also fell short of Wall Street’s projections.

Despite the profit miss, revenue rose 20% year-over-year to $13.47 billion, surpassing analyst estimates of $13.28 billion. Gross bookings climbed to $49.74 billion, beating expectations, driven by a 29% jump in delivery sales and a 20% rise in mobility revenue.

CEO Dara Khosrowshahi said the Uber One program continues to boost customer engagement, noting that users who use both rides and delivery services spend three times more than single-service customers. However, only about 20% of users currently utilize both, leaving significant room for growth.

The earnings disappointment comes despite Uber’s strong year-to-date performance, with its stock up more than 60% before Tuesday’s drop. Investors, however, remain focused on whether the company can sustain profitability while managing mounting legal challenges and regulatory scrutiny.

Uber and iFood Forge Strategic Partnership in Brazil Amid Market Shakeup

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Uber Technologies and iFood, Brazil’s leading food delivery platform, announced a strategic partnership on Wednesday aimed at unifying ride-hailing and delivery services in Latin America’s largest market. The collaboration will allow users of each app to access services from the other, marking a new era of convenience for Brazilian consumers.

Starting in the second half of 2024, the integration will enable:

  • iFood users to book Uber rides directly within the iFood app.

  • Uber users to order food, groceries, pharmacy items, and convenience goods through iFood’s delivery infrastructure from the Uber app.

Why It Matters

The move signals a cooperative shift between two former rivals, three years after Uber Eats exited Brazil in 2021 due to iFood’s overwhelming market dominance.

“Only around half of iFood and Uber customers in Brazil use both platforms. This partnership represents a big milestone,” said Uber CEO Dara Khosrowshahi.

“It’s a major step forward… innovating together to offer a new way to access everyday services,” added iFood CEO Diego Barreto.

By the Numbers

  • Uber in Brazil:

    • 30 million active users

    • 1.4 million drivers and couriers

    • 11 billion completed trips in Brazil (out of 61 billion globally)

  • iFood:

    • 55 million active users

    • 360,000 couriers

    • 120+ million orders per month in over 1,500 cities

Competitive Backdrop

The announcement comes just days after China’s Meituan, the world’s largest food delivery company, revealed plans to invest R$5 billion (~$890 million) to enter Brazil under its Keeta brand, signaling rising competition in one of the world’s fastest-growing delivery markets.

The Uber–iFood partnership could serve as a defensive strategy to solidify user engagement and stave off new entrants like Meituan by offering a broader range of services within a single app ecosystem.

As Brazil continues to digitize its urban mobility and food delivery sectors, this partnership sets the stage for cross-platform super-app functionality, streamlining daily life services for millions of users.

Uber Misses Q1 Revenue Target Amid Slower U.S. Travel, Leans on Global Growth and Robotaxis

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Uber Technologies (UBER.N) reported Q1 revenue of $11.53 billion, slightly below analyst expectations of $11.62 billion, with its core ride-hailing business posting its slowest growth since the pandemic, due largely to weakened U.S. travel demand. Despite the miss, Uber struck an optimistic tone with above-estimate forecasts for Q2, pointing to international expansion and autonomous vehicle partnerships as key growth drivers.

“The categories we operate in … tend to be quite consistent, even during macro uncertainty,” CEO Dara Khosrowshahi told analysts.

Key Financial Highlights:

  • Total revenue: $11.53B (vs. $11.62B expected)

  • Ride-hailing revenue growth: +15% (slower than past quarters)

  • Delivery revenue growth: +18% (in line with forecasts)

  • Q2 gross bookings guidance: $45.75B–$47.25B (vs. $45.83B expected)

  • Q2 adjusted EBITDA: $2.02B–$2.12B (vs. $2.04B expected)

CFO Prashanth Mahendra-Rajah cited a “slightly higher mix of international trips” and “lower inbound U.S. travel” as key factors behind the slowdown. Broader foreign spending on U.S. travel dropped sharply in March, reinforcing a trend echoed by Airbnb.

Strategic Moves to Offset U.S. Softness:

  • 85% stake acquisition of Trendyol Go (Turkey) for $700M

  • Partnership with China’s Pony AI for robotaxi deployment

  • Robotaxi service with Waymo in Austin showing high usage and scaling plans

Despite the revenue miss, Uber’s stock, which is up 42% year-to-date, fell only ~1% by market close after dipping 6% in early trading.

“We see the miss as immaterial, and as such, believe the stock will recover,” said Jamie Meyers, senior analyst at Laffer Tengler Investments.

Uber’s positioning in delivery, mobility, and autonomous vehicles continues to insulate it from domestic travel headwinds, with international markets and automation partnerships paving the way for sustained long-term growth.