Bengaluru, India – Uber has predicted lower-than-expected gross bookings for the second quarter, following a disappointing performance in the first three months. This news caused a drop of nearly 7% in the company’s shares before the market opened on Wednesday. The decrease in a significant metric that reflects the total revenue generated on the Uber platform signifies a decline in demand for their ride-share and food delivery services.
In contrast, Uber’s competitor Lyft exceeded expectations in its recent results and projected a robust second quarter, attributing it to a widespread increase in ride-share demand across the industry. Both Uber and Lyft have been fervently expanding their presence in the ride-share market of the United States and Canada, especially after Lyft appointed David Risher as CEO in April.
Risher’s leadership at Lyft has focused on not only reducing costs but also enhancing user experience by reducing wait times and offering competitive pricing. This strategy has led to an increase in the number of users for Lyft. Uber, on the other hand, expects its second-quarter adjusted core profit to fall within the range of $1.45 billion to $1.53 billion, with the midpoint of $1.49 billion surpassing market expectations.
Despite the setback in the first quarter, primarily due to a decline in its food delivery unit, Uber is optimistic about its profitability endeavors. The company’s revenue climbed by 15% to $10.13 billion in the quarter ending on March 31, slightly surpassing analysts’ estimates. Mobility revenue saw a higher-than-anticipated growth of 30%, while the food delivery unit experienced a growth rate of 4%, falling short of expectations.
Uber’s performance was boosted by increased ride-share activity from airport and office commuters, while the delivery segment benefited from a rise in new users and order frequency. The company reported an adjusted core profit of $1.38 billion in the first quarter, marking an 82% increase from the previous year and outperforming analysts’ projections.
Overall, Uber’s future outlook remains positive despite the challenges faced in the first quarter. The competition between Uber and Lyft continues to intensify in the ride-share market, with both companies striving to capture a larger share of the market. Investors are closely monitoring the performance of these two industry giants as they navigate through a changing landscape in the transportation sector.