Uber CEO Dara Khosrowshahi is trying to expand the offering of rides as demand grows. Gross bookings increased 20% in the three months to September 30, according to results released on November 4. The platform has 215 million monthly active consumers, a metric that covers ride-hailing and delivery services.
Uber’s non-GAAP operating income grew 38% to $2.3 billion, with free cash flow of $2.5 billion. Revenue increased 10% from the same period last year to US$14.8 billion. The company reported earnings of 25 cents per share under standard accounting rules and 88 cents per share on an adjusted measure.
Freight volume grows, but losses still need to be made up
For Khosrowshahi, two businesses still have room to grow: freight and self-driving cars.
Ed Kim, president and principal analyst at automotive research firm AutoPacific, sees an opportunity for Uber to apply its experience in rides and food delivery to freight. “Can they shake up the logistics industry in the same way?” he told the Observer.
Uber Freight is essentially a digital broker that connects companies that need to move goods by truck with trucking companies and independent drivers to make the journey happen. Businesses pay Uber Freight, and Uber Freight pays truck drivers; the arrangement reflects the role Uber plays between customers and drivers in its core mobility business. Uber Freight aims to solve problems that have long plagued trucking: wasted trips caused by empty trailers and the slow process of finding cargo. The industry calls these “empty miles” or “useless miles.”
Freight revenue surged 34% to $1.76 billion in the three months ended Sept. 30, although the unit still recorded a segment operating loss of $33 million on Uber’s adjusted measure. That growth helped the overall business, but wasn’t enough to make freight profitable. Uber launched the business in 2017, months before Khosrowshahi became CEO.
Kim said Uber has the potential to transform the market, comparing the opportunity to growing industry expectations for on-demand services. “Everyone is in a hurry. Everyone needs their solution yesterday,” he said.
Increasing the cost of self-driving cars
Mobility Global automotive analyst Stephanie Brinley also expressed concern about autonomous vehicles and capital investment. The Financial Times estimated in April that Uber’s deal would see it invest more than $2.5 billion in equity and spend more than $7.5 billion on its robotaxi fleet over the next few years, Reuters reported at the time. These agreements are subject to partners meeting deployment milestones.
Uber announced partnerships with Nuro, Rivian, Avride, Lucid and Alphabet’s Waymo in certain cities. According to a Bloomberg report on November 4, Waymo plans to start providing ride-hailing services through its own app in Austin and Atlanta in January 2028, ending Uber’s exclusivity in these two regions. That in itself doesn’t determine when all Waymo rides will leave Uber.
“Uber is the platform and the connector, that’s where they started and that’s where they are,” Brinley told the Observer. For that model, it made sense to partner with the automaker, she said. She sees this as a different strategy than Waymo’s, rather than an inherently better approach.
Khosrowshahi expects there will be about 700 fully driverless vehicles on Uber by the end of the year, and more than 2,000 by 2027. Uber and Motional launched a service in Las Vegas in March; Motional is majority-owned by Hyundai Motor Group. Amazon’s Zoox also announced that it will not launch services in Las Vegas through Uber this year.
Brinley said companies operating robotaxi fleets would still have to prove that doing so would cost less than paying drivers. “The jury is still out on that, probably,” she said.
Brinley said robo-taxi’s share of the broader national market was still too small to change the way people paid for travel. She doesn’t think they will significantly change household transportation costs for most people over the next five to 10 years.
Kim said the next few years may be the toughest time for Uber’s self-driving cars. Wider deployment is at least two to three years away and depends on falling hardware costs, he said. “The returns won’t be immediate,” he said, noting that Uber must immediately manage costs, prices and investor enthusiasm. It will be “a very careful balancing act,” he said.
