Uber's Growth Falls Short of Expectations Amid Decline in US Travel

Uber has released its financial results for the first quarter of the year, showing an increase in bookings, revenue, and profits compared to the same period last year. However, these figures have not met market expectations. The company attributes part of this shortfall to a decrease in tourist arrivals in the United States, particularly since the presidency of Donald Trump.

In addition to disappointing financial metrics, employee dissatisfaction has risen due to a stricter in-office attendance policy. Starting in June, employees will be required to work at least three days a week in the office, an increase from the previous two-day requirement. Furthermore, some employees who had previously been allowed to work remotely will now also be required to attend the office. This shift comes alongside tightened eligibility criteria for paid leave, with the requirement for a sabbatical increasing from five to eight years of service.

In an internal meeting, Uber's CEO explained that the changes were necessary for enhancing collaboration and innovation within the company. Despite employee pushback, he emphasized the company's desire to cultivate a vibrant workplace culture, suggesting that if the new policies prompt employees to reconsider their employment, it is a risk the company is willing to take.

Despite these challenges, Uber reported a 18% increase in bookings in the first quarter, leading to a revenue rise of 14% year-over-year, totaling $11.5 billion. Operating profit also grew, climbing from $1.1 billion to $1.2 billion. The net income for the company reached $1.8 billion, a significant turnaround compared to a loss of $654 million recorded at the beginning of 2024.

Initially, the stock price dropped nearly 7% following the announcement, as analysts had anticipated even higher growth figures. However, the shares recovered somewhat, closing 2.5% lower than the previous day. Uber's CFO noted that reduced international travel has led to a decline in gross bookings per trip, echoing concerns raised by Airbnb regarding decreased travel from Canadian tourists to the US.

While the mobility segment of Uber's business, which focuses on ride-hailing, experienced slower growth, the delivery segment, which includes Uber Eats, saw a robust 18% revenue increase, totaling $3.8 billion. In contrast, revenue from ridesharing grew by only 15%, reaching $6.5 billion.