Uber Technologies warned investors that first-quarter profit would likely fall short of expectations, as a higher effective tax rate and deliberate investment in lower-cost ride options pressured near-term margin performance.
Shares slid sharply in premarket trading after the company outlined an adjusted effective tax rate between 22% and 25%, reflecting its expansive global footprint across more than 70 countries.
“Our ETR reflects our business with operations across 70+ countries, which results in a tax profile comparable to large US multinationals with significant global operating presence,” Uber said.
The company emphasized that this tax profile is structural rather than temporary, tied closely to the complexity of operating at scale across numerous jurisdictions worldwide.
Affordable Products Drive Trip Growth But Pressure Margins
Trip volumes climbed 22% during the fourth quarter as customers increasingly selected shared rides and other lower-cost mobility products designed to make the platform more accessible in price-sensitive environments.
Executives had previously signaled a conscious decision to slow margin expansion in favor of accelerating bookings growth, proving the model’s resilience while building long-term user engagement across diverse markets.
These affordability-focused offerings helped expand demand but diluted short-term profitability, particularly as shared and discounted options carry lower margins than premium ride services across many regions.
Uber expects first-quarter adjusted earnings per share between 65 cents and 72 cents, below analyst forecasts, after reporting 71 cents for the fourth quarter, also missing consensus estimates.
Bookings Strength And Strategic Pricing Support Outlook
Despite earnings pressure, gross bookings are projected between $52.0 billion and $53.5 billion for the first quarter, exceeding expectations and highlighting sustained demand across both mobility and delivery services.
Chief Executive Dara Khosrowshahi said improving pricing conditions and declining insurance expenses in the United States should support faster domestic growth and gradual margin expansion during the year.
The company reiterated that its switch from adjusted core profit guidance to adjusted earnings per share provides investors a clearer measure of recurring operating performance in a complex global environment.
Leadership Change And Accounting Adjustment Impact Reporting
Uber announced that finance chief Prashanth Mahendra-Rajah will step down, with Balaji Krishnamurthy, a former Goldman Sachs executive who joined the company in 2019, assuming the chief financial role.
A change in accounting treatment for parts of its UK business starting in January will lower reported mobility revenue margins by roughly 350 basis points in the first quarter and into 2026.
The company clarified that this accounting revision affects how revenue is presented rather than altering the underlying profitability or cash generation of the mobility segment.
Positioning For Autonomous Ride Future Alongside Delivery Expansion
Uber is preparing for the rise of autonomous ride services through partnerships with companies including Waymo and Lucid, aiming to integrate robotaxis onto its platform alongside traditional human-driven vehicles.
Both mobility and delivery segments expanded during the fourth quarter, with delivery bookings growing faster, driven by strong demand for convenience services that typically operate with slimmer margins than ride-hailing.
This blend of growth initiatives, structural tax realities, and strategic investment in affordability underscores Uber’s focus on scale and long-term platform dominance rather than immediate margin maximization.
