--- title: "UBER (Trans): Short on Drivers, Not on Demand; Profit Growth Still Accelerating" type: "Topics" locale: "en" url: "https://longbridge.com/en/dolphin/post/44770534.md" description: "Delivery GTV rose 23% YoY, with organic growth accelerating. Q4 non-GAAP EPS guidance midpoint implies +37% YoY. Mobility growth came in below expectations due to driver shortages in international markets such as Brazil and India. The company is pivoting to fully driverless commercial operations, targeting about 700 Robotaxis by year-end and over 2,000 by end-2027." datetime: "2026-11-04T14:05:31.000Z" locales: - [en](https://longbridge.com/en/dolphin/post/44770534.md) - [zh-CN](https://longbridge.com/zh-CN/dolphin/post/44770534.md) - [zh-HK](https://longbridge.com/zh-HK/dolphin/post/44770534.md) author: "[Dolphin Research](https://longbridge.com/en/dolphin.md)" generator: "portal-rs" --- # UBER (Trans): Short on Drivers, Not on Demand; Profit Growth Still Accelerating **I. Earnings Highlights** 1\. **Capital allocation**: Priorities unchanged — organic growth first, then the $10bn AV ecosystem commitment tied to delivery milestones, followed by M&A and buybacks. Next year UBER will dial back M&A to focus on integrating announced deals, with emphasis on organic growth, AV, and opportunistic repurchases. 2\. **Guidance** a. **Q4 EPS**: Non-GAAP EPS guided at $0.95–0.99; the midpoint implies +37% YoY, above ~+35% in Q3. Mgmt said profit growth is accelerating, laying the groundwork for 2027. Implied Adj. EBITDA is $3.13–3.23bn. b. **Growth range**: Q4 Gross Bookings guided at $63.25–65.25bn, +18%–22% YoY in constant currency (~1pt FX headwind and ~1pt Middle East drag), consistent with the range of recent quarters. Intl mobility supply issues have not changed this view. c. **Mobility margin**: Q4 mobility supply investments will impact take rate but not margins materially. Principle is steady annual expansion in company-level margins, ideally by segment as well, with normal QoQ volatility. 3\. **Key prints this quarter**: Gross Bookings rose >20% YoY for the 5th straight quarter, with non-GAAP EPS up 35% YoY. TTM FCF reached a record $10.4bn. 4\. **AV financing framework** a. **Long term**: AV fleets to be financed by third-party capital, not the UBER balance sheet. Infrastructure and vehicle financing arrangements will be announced over time. b. **Near term**: Limited capital required through ~700 vehicles by end-2026 and 2,000 by end-2027. Third-party capital to be brought in as fleets scale beyond 10k from 2028 onward. **II. Earnings Call Details** **2.1 Management Commentary** 1\. **Platform**: User scale and frequency hit records, with direct user relationships at the core of the AI strategy. MAUs reached 215mn, usage frequency also hit a new high, and Uber One membership is ~55mn. b. Using AI to make everyday transactions simpler and more personalized, while selectively testing new distribution channels that can drive incremental demand. 2\. **Mobility**: Growth is healthy but below expectations, mainly due to driver supply lagging demand in several Intl markets. Targeted investments are underway to improve supply and balance, with improvement already visible in Oct. b. Aim is steady growth while maintaining high profitability. 3\. **Delivery**: Gross Bookings rose 23% YoY, with organic growth accelerating. Investments in selection, affordability, and reliability are broadening Uber Eats from restaurants into weekly grocery and instant needs. 4\. **Autonomous**: Pivoting from pilot partnerships to fully driverless commercial ops, validating the utilization and unit economics required for scale. Zoox goes live on UBER in Las Vegas later this month, with Motional to follow into fully driverless operations. b. Expect ~700 fully driverless vehicles on UBER by end-2026 and >2,000 by end-2027. 5\. **Q4 focus and personnel**: Priorities are improving mobility supply, sustaining Delivery momentum, delivering AV milestones, and continuing profit growth. President and Chief Corporate Affairs Officer Jill Hazelbaker departs after 10 years to join OpenAI, with internal promotions to backfill. **2.2 Q&A** *Q: How will AV fleet financing be structured? What are the implications for the balance sheet, FCF, and returns?* A: **Long term, third-party capital will finance AV fleets; early on, vehicles may sit on UBER's statements given unproven residual values.** The structure is not yet detailed, but the $1bn facility signed with Santander for traditional fleet partners is the template, and similar deals are advancing with attractive returns for third parties. Fleet financing for rentals depends on residual values, which AVs lack today, so future financing will skew toward fleet revenue potential. Vehicles on the UBER network achieve ~30% higher utilization vs off-network, and assets can be reassigned to other owners on the network if a fleet fails, lowering funding costs. Financial institutions are keen to diversify beyond data centers, but banks still need validation of the model and utilization advantages. *Q: What changed in Intl supply this quarter (last time you cited Brazil)? How intense and how long will supply investments last?* A: **It is a continuation of a full-year trend, driven by fuel prices and immigration; supply growth accelerated in Oct.** The Middle East conflict lifted global fuel prices, hitting price-sensitive EMs hardest: last quarter in Brazil, courier competition pulled away motorcycle capacity, and this quarter fuel prices pressured supply in both Brazil and India. Immigration has been a factor all year; combined with stronger holiday demand, it amplified supply tightness in Canada. Sept–Dec is peak season for both Mobility and Delivery, bringing YoY and seasonal pressure at once, with markets like Brazil still relying on two-wheel capacity. This is a supply, not a demand constraint, and targeted spend on driver acquisition, retention, and activation is underway. **Global supply growth accelerated in Oct, with notable improvement in Brazil and India**, and the growth range remains intact. *Q: What does U.S. grocery need to accelerate? Do you need more owned dark stores or in-house fulfillment?* A: **Spend is concentrated on selection, affordability, and experience; dark stores will be selective and market-dependent.** Grocery is at ~$15bn annualized Gross Bookings, growing ~40% YoY, and UBER sees a $10tn market with consumer expectations moving toward '15-minute delivery.' Selection: Costco expanded nationwide, with new Intl partners like Tesco in the UK and Priceline in Australia. Affordability: members get free delivery on $60+ baskets. Experience: higher pay for top pickers and requiring shelf photos to verify stockouts. Delivery Hero's instant retail and dark store ops reached breakeven after seven to eight years and will be consolidated post-close. The CFO added: the Middle East could build on Delivery Hero's dark-store footprint, and Turkey on the existing business plus Getir, which is near profitability; Taiwan has been tested organically. Entry depends on operating capability, market conditions, and ROA. *Q: How will the ~700 vehicles by year-end and ~2,000 next year be distributed geographically, and what is the rollout cadence? Roughly half U.S., half Intl?* A: **Confident in reaching 2,000 by 2027, with a target of tens of thousands from 2028.** No direct split given for U.S. vs Intl (the prepared remarks already put it at roughly half each by end-2027). In the U.S., UBER is live with Waymo; Intl, it is offering safety-operator-free services with WeRide and BIDU in several markets. Zoox and Motional go live in Las Vegas this year. **In early 2027, Nuro/Lucid will launch in California and Houston, Texas**, with another partner (likely Avride) added in Texas mid-year, all fully driverless; Intl, Pony.ai and Momenta will add safety-operator-free capacity. By end-2027, UBER will run safety-operator testing with NVIDIA, Rivian and others, plus Wayve outside the U.S. UBER already operates in these cities, has government relationships, and latent demand, enabling rapid launch and high utilization for partners. *Q: Can the cited 30% uplift in paid trips and 23% lower fixed costs from integrating with UBER be sustained?* A: **We believe the edge is durable, with a long-term goal for AV trip margins to match human-driver levels.** The 30% compares U.S. mixed deployments on UBER vs mature self-operated deployments, the latter skewed by San Francisco, which is unusually favorable for AVs; utilization typically falls as self-op expands. Reality is bearing this out: Waymo and TSLA's newly launched markets see low-teens daily trips per vehicle this year, while UBER's mixed markets are in the high-20s, a 100%+ uplift. Two additional cost advantages: scale purchasing power with OEMs for better pricing, and shared charging, maintenance, and fleet infrastructure across multiple AV partners, akin to cloud vs self-built data centers. Once margins converge, savings can be passed to consumers to expand TAM. *Q: Any change in capital allocation priorities? What is the logic behind recent deals like ezCater?* A: **Priorities unchanged; M&A will be trimmed next year to focus on organic growth, AV, and opportunistic buybacks.** The AV piece is a $10bn milestone-based commitment for partner investments and/or AV fleets. The M&A pullback is to prioritize integration, and acquired assets are outperforming deal cases as standalone operators. Three M&A categories: geographic expansion, e.g., Delivery Hero, to extend platform advantages in Mobility, Delivery, and membership to more countries. Second, specialized and profitable capabilities — premium mobility is up 35% YoY and U4B nearly 50% YoY, with Blacklane augmenting high-quality supply and ezCater focusing on corporate dining; U4B now reaches ~half of the Fortune 500. Third, new user-facing products such as commuter parking (SpotHero). The CFO added: every deal is benchmarked vs build and buybacks for accretion, ezCater is already profitable with synergies to come, and the profit delta vs building in-house could be several hundred million dollars. *Q: Would a potential DASH–CART merger be a risk or an opportunity for UBER?* A: **UBER sees limited impact; merchants prefer deepening ties with UBER.** The focus remains on selection, quality, on-time rates, and fulfillment. Merchants want multi-channel partnerships and to develop first-party channels; a merger would remove a platform choice and concentrate share online. Some merchants have already reached out, both concerned about the deal and seeking to deepen with UBER to avoid single-platform dependence. UBER believes such combinations are distracting; whether two or three players compete is for regulators to decide. *Q: What are U.S. Mobility trends in Q3 and Q4? How are CA and TX performing vs Intl markets with higher AV penetration?* A: **U.S. growth is resilient; Q3 slowed modestly, less than Intl.** Rising fuel prices are global, and the U.S. has some supply pressure addressed with targeted spend. Insurance tailwinds continue to build, and **trip growth in California has clearly accelerated, outperforming the U.S. average**. The barbell strategy is healthy, with **U.S. barbell products growing at 3x the overall biz. in Q3**, including Comfort, Reserve, and Black, as well as features for new cohorts like teen accounts and women-preference. Sparse markets remain a big opportunity: in the past 12 months, less than 10% of age-eligible consumers in sparse markets used UBER at least once, vs ~50% in dense markets. *Q: What is driving the acceleration in organic growth in Delivery? Is core restaurants also accelerating?* A: **U.S. Delivery has accelerated for two consecutive quarters, and core restaurants are also accelerating.** Five drivers: mix shift as faster-growing grocery and first-party volumes rise; selection, with U.S. merchants up ~12% YoY; membership, with members now at 70% of Delivery Gross Bookings; sparse-market strategy; and promos, with ads and merchant-funded offers at a >$10bn annualized run rate. The biggest near-term challenge, similar to Mobility, is ensuring courier supply keeps pace with demand. *Q: With higher supply spend in Intl, can Mobility's ~8% margin hold? Is the impact temporary or structural?* A: **The margin trajectory is intact; Q4 supply spend mainly impacts take rate.** There will be normal quarterly swings from peak-season supply investments, etc. Q3 delivered mid-30s EPS growth, and Q4 guidance is higher, indicating accelerating profit growth. The CEO added: incentive pools can flex between riders and drivers. **Last year more subsidies went to riders to lower price; this year subsidies were cut on the rider side and shifted to driver incentives**, which can lift rider prices at the margin and must be balanced against profitability. Allocation is algorithm-driven, trained on billions of trips, e.g., weighing the return from a dollar to a Brazilian driver vs an Indian rider. *Q: On AI agents, what are the goals and differentiation of in-app agents? How do you view third-party AI platforms?* A: **Priority is strengthening direct experiences; UBER will partner with third-party AI agents, but volumes are tiny today.** Members already account for 50%+ of Gross Bookings; median ride booking time is ~50 seconds with 75% of trips one-tap, and median reorder time in Delivery is ~90 seconds. The CEO cited online travel's reliance on Google as a cautionary tale and aims to avoid that dependency. In-house, the cart assistant drives roughly 2x average basket size, with food-order and driver assistants in development. On third parties, nearly all AI companies are in discussions, and UBER expects net-new demand; most markets have only two large Mobility and two Delivery platforms, but there are already eight AI assistants and soon more than ten, implying heavy demand for UBER services. The CFO added: during last week's Halloween, among ~320mn trips across Uber and Uber Eats, **AI agents drove ~500 Delivery orders and just 4 rides**, still extremely early days. \ **Risk Disclosure and Statement:**[**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [UBER.US](https://longbridge.com/en/quote/UBER.US.md) - [COST.US](https://longbridge.com/en/quote/COST.US.md) - [UBRL.US](https://longbridge.com/en/quote/UBRL.US.md) - [UBEW.US](https://longbridge.com/en/quote/UBEW.US.md) - [COTG.US](https://longbridge.com/en/quote/COTG.US.md) - [COSW.US](https://longbridge.com/en/quote/COSW.US.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**