Uber on Wednesday reported earnings that disappointed investors, as rising legal bills and lower demand for rides in some parts of the world led to a shortfall compared to analysts’ forecasts.
Uber recently settled a lawsuit brought by Australian taxi drivers and is facing a new lawsuit from London taxi drivers. Some regulators have also questioned the way it classifies workers, which protects them from providing some benefits to drivers.
The company also cited weaker-than-expected demand and was hurt because some of its investments had lost value during its latest quarter.
Uber’s operating profit in the first quarter was $172 million. That was up from an operating loss of $262 million in the same period last year, but still less than half of what analysts had expected by that measure. It also posted a net loss of $654 million for the quarter, worse than last year’s $157 million and also much weaker than analysts expected.
Uber shares fell more than 7 percent in early trading.
The ride-hailing app, founded in 2009, last year reported its first annual profit as a public company, but has at times struggled to grow at a pace that satisfies investors. As it moves into other areas, such as freight transportation and food deliveries, regulatory challenges have hindered growth. Its main rival, Lyft, reported stronger-than-expected profits on Tuesday amid increased demand.
Uber’s gross bookings – which is the amount of money Uber collects for a ride, food delivery or freight shipment – rose 20 percent from a year earlier, to $37.7 billion, slightly below expectations. the analysts.
Uber is working to grow its restaurant delivery arm, Uber Eats. The company announced Tuesday that it would partner with Instacart, allowing users of the grocery delivery app to order from restaurants through Uber Eats.
Even with that partnership, the company still intends to expand its Uber Eats delivery capabilities to grocery and retail stores, Uber CEO Dara Khosrowshahi said in a statement Wednesday. By allowing Instacart users to place orders through Uber Eats, the transportation app can expand its base in key areas like the suburbs, he said, and better compete with rivals like DoorDash.