The company is struggling to recruit and detail enough drivers to address a surge in demand in key global markets, management said on an earnings call Wednesday (Nov. 4).
“Mobility continued to see healthy growth, but came in below our expectations as a result of driver supply not keeping pace with strong consumer demand in several international markets,” CEO Dara Khosrowshahi told analysts.
“We are responding with targeted investments to improve driver availability and marketplace balance, and we saw encouraging improvement in October.”
The company pointed to macroeconomic and seasonal pressures compounding the driver deficit, including elevated global fuel prices — which heavily impact driver earnings in price-sensitive emerging markets like Brazil and India — along with tighter immigration policies and increased competition for two-wheel couriers.
To counter the shortage, Uber is rebalancing algorithm-driven incentives away from discounts for riders and toward pay increases for drivers, even if this means higher fares for consumers.
Despite the supply headwind, consumer appetite remains robust across both rides and delivery services, as consumers now “want everything faster,” as Khosrowshahi put it.
“I think when Amazon brought overnight shipping, it was magic,” the CEO said. “Now, next-hour shipping is magic, and pretty soon people are going to expect everything in 15 minutes. We play right into that area. The areas of investment for us are really about selection, they are about affordability, and they are about consumer experience.”
To deepen engagement, Uber is deploying artificial intelligence (AI) tools such as personalized checkout assistants to expand order sizes, while shifting its autonomous vehicle strategy from initial testing to commercial deployment.
The company expects to have 700 driverless vehicles operating on its network by year-end, scaling to 2,000 by late 2027 through third-party fleet financing models.
Uber closed the quarter with record audience metrics, reaching 215 million monthly active platform consumers and fueling its fifth consecutive quarter of 20%-plus gross bookings growth.
Meanwhile, the company’s grocery and retail segment hit a $15 billion annual run rate, expanding 40% year over year, while delivery gross bookings climbed 23%.
Against that backdrop, Khosrowshahi said Uber is “investing in shopper quality, so we are paying high-quality shoppers more,” while also introducing tech innovations, such as the ability of those shoppers to take a photo of an empty shelf to verify that the item that customers are looking for isn’t there.
