Uber Exceeds Bookings Outlook, Signals Growing Demand in US Market

Uber Sees Robust Demand Amid Geopolitical Tensions

Uber Technologies Inc. has reported a better-than-expected forecast for bookings, signaling that strong demand from US commuters and travelers will offset the impact of geopolitical tensions in the Middle East. The ride-hailing service guided total gross bookings to between $56.25 billion and $57.75 billion for the three-month period ending in June, surpassing analyst estimates of $56.23 billion.

Total gross bookings grew 25% to $53.7 billion for the three months ended March 31, exceeding the Bloomberg-compiled analyst estimates of $52.9 billion. This growth is attributed to strength in Uber's core US business, delivery demand in international markets, as well as a return to growth by its freight unit.

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Uber's core US rideshare business is expected to "accelerate further" this year, with Chief Executive Officer Dara Khosrowshahi stating that heightened insurance costs have moderated, leading to improved trip growth in markets such as San Francisco and Los Angeles.

Shares of Uber jumped more than 9% to $79.69 at 7:06 a.m. in premarket trading in New York after the results were released. Rideshare peer Lyft Inc. also rose about 4%. Uber's results will set expectations for the broader ride-hailing and food-delivery industries, as Wall Street closely tracks the fallout of the war in Iran on gig-economy drivers and travel demand.

The company has been investing to expand its higher-margin premium offerings, focusing on bigger-spending corporate travelers and providing luxury services with professional chauffeurs. Uber aims to serve as many as 1 million organizations and exceed $10 billion in gross bookings by 2028. Its business-to-business operations currently generate more than $5 billion annualized bookings and work with more than 300,000 organizations globally.

Uber will moderate the pace of hiring relative to its plans entering the year, due to productivity gains seen from the internal use of generative AI tools. The company has set a target for its business-to-business operations to exceed $10 billion in gross bookings by 2028, with the segment currently generating more than $5 billion annualized bookings and working with more than 300,000 organizations globally.

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