Insights - Two decades ago, ride-hailing wasn’t a term that anyone had heard of. However, the rise of massive ride-hailing platforms have changed that and allowed anyone to catch a card ride when they need. The biggest of those ride-hailing providers is Uber Technologies Inc (NYSE: UBER).
The company consider itself a “mobility” company given it has expanded beyond just ride-hailing and now offers a food and grocery delivery service as well as a freight service too.
Uber has been transformed since current CEO Dara Khosrowshahi took over the top job in August 2017. He brought Uber to the public markets with an IPO in 2019 and also navigated the business to its first ever annual profit in 2023.
The company is set to report its Q3 2024 earnings on Thursday (31 October) before the market opens and here are two things investors should be watching.
Mobility and delivery bookings
Uber breaks its business into three units, with its mobility division being the main one that involves all its ride-hailing and bookings across various transport modes. In Q2 2024, the company reported that its mobility division posted gross bookings of US$20.6 billion, which was up 23% year-on-year.
Its other big contributor to gross bookings is Uber’s delivery business. In the company’s latest reported quarter (Q2 2024), Uber posted delivery gross bookings of US$18.1 billion, which was a 16% year-on-year increase from the same period in 2023. Its final unit (freight) saw flat bookings for Q2 2024 and only brought in US$1.27 billion in gross bookings for the period.
CEO Khosrowshahi had previously said the company is expecting bookings in the range of US$40.25 billion and US$41.75 billion for Q3 2024 and investors will be watching closely to see if the company can outperform on this key metric.
Uber has announced some key initiatives with partners in recent months, including a partnership with Instacart that would add a “restaurants” tab to the grocery delivery platform, enabling Uber Eats to fulfil restaurant orders.
More updates on any growth from these sorts of initiatives will be on investors’ minds.
Growth of MAPCs
Uber has developed a key metric to gauge the growth of its user base and it terms it “monthly active platform consumers”, also known as MAPCs. The company has seen strong growth in this metric and that continued in Q2 2024 as MAPCs hit 156 million, up 14% year-on-year. Meanwhile, its trips on its platform reached 2.77 billion during the quarter, a 21% year-on-year increase from trips recorded for Q2 2023.
Inevitably, investors will be wanting to see further evidence that Uber’s platform is both “sticky” and growing in that it’s able to attract new users but that current users are also more regularly using the platform.
In terms of overall profit guidance from Uber, the company projected Q3 2024 adjusted EBITDA of between US$1.58 billion and US$1.68 billion, representing 45% to 54% year-on-year growth.
Besides the growth in users and trips, investors will also be keen to hear more on Uber’s autonomous driving efforts – given Tesla’s recent Robotaxi event – and whether the company plans to acquire other capabilities. News came out only a few weeks ago that Uber had been looking to acquire online travel agent (OTA) booking platform Expedia Group Inc (NASDAQ: EXPE).
Uber stock is up 33.1% so far this year and has outpaced the S&P 500 Index’s gain of 22.8% over the same period.
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