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

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.