Fundamentals Are Solid, but Autonomous Driving Concerns Keep UBER “Stuck in Traffic”

Overview

UBER’s 2Q26 results were broadly in line with to slightly better than Bernstein’s expectations: gross bookings continued to grow by more than 20%, Delivery accelerated, the U.S. Mobility business improved, and adjusted EBITDA slightly exceeded expectations. The stock was down about 7% at the time of the report, with the main issue not being current-quarter fundamentals but rather the competitive threat that autonomous driving may bring, approximately $10 billion in multi-year investment commitments, and changes to the free cash flow model. Bernstein believes the current valuation already reflects substantial pessimism, but a stock re-rating still requires more evidence of autonomous driving commercial deployment and investment returns.

Core views

First, core business growth remains healthy, with constant-currency gross bookings increasing 22% year over year and continuing to achieve more than 20% growth at substantial scale. Second, slower trip growth mainly stemmed from Brazil Moto supply issues and a higher mix of higher-ticket businesses, and did not significantly impair margins. Third, the Delivery business has good growth quality, driven by Uber One, grocery and retail, and advertising. Fourth, the market’s pricing of autonomous driving remains relatively pessimistic; UBER is being questioned both for lacking proprietary autonomous driving technology and for bearing capital-intensity concerns as it increases related investment. Fifth, the company’s capabilities in platform commercialization, demand aggregation, and vehicle utilization management may become long-term advantages, but this view requires validation from future deployment data.

Analysis framework

The report compares actual quarterly results with Bernstein forecasts and consensus expectations, and decomposes operating metrics such as Mobility, Delivery, trips, bookings, take rate, and adjusted EBITDA; it then assesses the impact of the autonomous driving partnership network, financing model, deployment progress, and competitive pricing on future cash flow, and finally adjusts the target price using cash flow multiples, adjusted EBITDA multiples, and discounted cash flow methods.

Methodology notes

• Earnings AnalysisActual Results Versus Expectations Comparison

  Assess earnings quality through differences among actual results, institutional forecasts, and consensus expectations.

  The report believes second-quarter results and third-quarter guidance were generally in line with to slightly better than expectations, but did not meet the market’s required standard of sustained beats and raised guidance amid the autonomous driving controversy.

• Operating AnalysisSegment and Key Operating Metrics Analysis

  Identify sources of growth by combining bookings, trips, users, drivers, business mix, and margins.

  The report attributes the divergence between bookings growth and trip growth to the slowdown in Brazil Moto and a higher mix of higher-ticket businesses, and focuses on assessing U.S. Mobility, Delivery, Uber One, grocery and retail, and advertising.

• Strategic AnalysisAutonomous Driving Ecosystem and Capital Intensity Assessment

  Assess the impact of technology partners, vehicle financing, infrastructure investment, commercial deployment, and platform utilization on long-term competitiveness.

  The report believes the approximately $10 billion commitment is a multi-year transitional investment tied to technology milestones, and whether third-party financing can ultimately take over and the technological progress of partners are key variables in the investment thesis.

• Valuation AnalysisMultiple Valuation and Discounted Cash Flow

  Determine the target price by combining adjusted EBITDA multiples, free cash flow multiples, and discounted cash flow valuation.

  The body states that the $95 target price references 13x next-twelve-month adjusted EBITDA and 16x price-to-free-cash-flow, and lowers long-term bookings and the terminal free cash flow multiple to 15x in the discounted cash flow model; the valuation disclosure separately includes a combination of 50% free cash flow multiple and 50% discounted cash flow, with a discount rate of 12% and a perpetual growth rate of 3%, showing differences in presentation between the two sections.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• UBER.US

  Core covered stock

  Strengths

  Gross bookings maintain more than 20% growth, the U.S. Mobility business is improving, Delivery, membership, grocery and retail, and advertising businesses are growing strongly, adjusted EBITDA continues to improve, and the current valuation is low.

  Weaknesses

  Trip growth is slightly below expectations, evidence of autonomous driving commercialization is insufficient, rising capital investment changes free cash flow expectations, and the stock lacks clear near-term catalysts.

  Comparison

  The report believes the current share price already reflects considerable pessimism around autonomous driving, but a cheap valuation alone is insufficient to drive a re-rating in the sector.

  Risks

  Autonomous driving competition, returns on capital falling short of expectations, tight driver supply, insurance costs, regulatory changes, and intense price competition.

• DASH

  Delivery business peer read-through

  Strengths

  Acceleration in UBER Delivery bookings, improvement in the restaurant business, and higher membership penetration reflect a strong delivery demand environment.

  Weaknesses

  UBER’s membership benefits and grocery and retail business put pressure on the core Delivery take rate.

  Comparison

  The report views UBER’s Delivery business performance as a positive leading signal for DASH’s quarterly results.

  Risks

  Industry incentive competition, price subsidies, and pressure on delivery margins.

• CART

  Grocery delivery peer read-through

  Strengths

  UBER’s annualized grocery and retail bookings have reached $15 billion and are maintaining growth of more than 40%, indicating strong demand in this category.

  Weaknesses

  Strong growth comes with a lower take rate and investment in membership discounts.

  Comparison

  The report believes UBER’s accelerating Delivery volume has a positive industry read-through for CART.

  Risks

  Intensifying competition, rising customer acquisition costs, and weakening unit economics.

• LYFT

  U.S. Mobility business competitor

  Strengths

  Accelerating U.S. Mobility demand and an improving insurance environment may also benefit LYFT.

  Weaknesses

  Platform scale, cross-business synergies, and the autonomous driving partner network may be weaker than UBER’s.

  Comparison

  Stable near-term share and insurance tailwinds may support LYFT, but the report is concerned that UBER will gradually gain share from it after competition intensifies.

  Risks

  UBER increasing supply investment, price competition, and autonomous driving commercialization putting pressure on share.

Key data

• Second-quarter gross bookings growthUp 22% year over year on a constant-currency basisBoth Mobility and Delivery were slightly better than Bernstein’s forecasts.
• Second-quarter Mobility business growthUp 20% year over year on a constant-currency basisThe U.S. business accelerated, and World Cup demand offset some of the impact from the war in the Middle East.
• Second-quarter Delivery business growthUp 25% year over year on a constant-currency basisSupported by Uber One, international markets, and grocery and retail.
• Second-quarter trip growthUp 18% year over year2 percentage points below the firm’s forecast, mainly affected by tight Moto supply in Brazil.
• Second-quarter adjusted EBITDA$2.82 billionSlightly above Bernstein’s forecast, with non-GAAP operating profit and EPS broadly in line with the model.
• Third-quarter gross bookings guidance$58.25 billion to $60.25 billionCorresponding to 18% to 22% year-over-year growth on a constant-currency basis.
• Third-quarter adjusted EBITDA guidance$2.86 billion to $2.96 billionExpected to modestly push up consensus expectations.
• Annualized grocery and retail bookings$15 billionHas maintained more than 40% year-over-year growth for several consecutive quarters.
• Annualized advertising revenue$2.5 billionUp 50% year over year in the second quarter.
• Autonomous-driving-related capital commitmentApproximately $10 billionCovers vehicle commitments, equity investments in autonomous driving companies, and physical infrastructure, as multi-year investments tied to technology milestones.
• Target price$95Lowered from $110, implying approximately 32% upside versus the $71.99 closing price on August 4, 2026.

Impact & implications

In the short term, solid results may support earnings forecasts, but are insufficient to eliminate market concerns over autonomous driving terminal-value risk and returns on capital investment, so valuation recovery may remain constrained. In the medium term, the key issues are whether partnership projects such as Wayve, Zoox, WeRide, and Nuro can be deployed as planned, and whether third-party financing can reduce UBER’s own capital burden. Acceleration in the Delivery business is a positive industry signal for DASH and CART; improvement in the U.S. Mobility business has a near-term positive read-through for LYFT, but UBER may further gain share over the long term if competition intensifies.

Risks

• Mobility and Delivery penetration may approach saturation or the macro environment may weaken, potentially causing gross bookings to fall below forecasts.
• Slower growth, intensifying competition, driver incentives, and rising insurance costs may compress margins.
• If driver supply shortages shift from cyclical issues to structural issues, they will impair Mobility growth and profitability.
• Driver classification, caps on delivery commissions, and other regulatory changes may affect the operating model and market sentiment.
• Price cuts or aggressive subsidies in Mobility and Delivery may lead to low profits, losses, or exits from certain markets.
• The Freight business may be unable to achieve profitable scale expansion or unlock value.
• Autonomous taxis may become a more economically attractive alternative, posing a long-term existential threat.
• The approximately $10 billion autonomous-driving-related investment may fail to match suitable technology partners or achieve attractive investment returns.
• If third-party vehicle financing does not materialize, UBER’s capital burden and free cash flow pressure may remain higher than expected for an extended period.

What to watch

• Wayve’s consumer testing in London and commercialization progress.
• Additional autonomous driving city deployments before year-end, especially the Nuro, Wayve, and Zoox projects.
• The pace of Waymo fleet expansion, launch of low-cost vehicle models, and pricing strategy.
• Investment timing, capital allocation, exit mechanisms, and third-party financing arrangements for autonomous driving projects.
• Continued acceleration of the U.S. Mobility business in the second half of 2026.
• Whether Brazil Moto driver supply and trip growth can recover.
• Growth and take-rate changes in Delivery, Uber One, grocery and retail, and advertising revenue.
• Whether third-quarter gross bookings and adjusted EBITDA can reach the high end of guidance.
• Software capabilities, technology milestones, and vehicle utilization data of autonomous driving partners.