$UBER · Asymmetric Investing by Travis Hoium · 2026-11-02

This arrow, if you're wondering , is Uber. I think Uber is being largely ignored by the market. The company's fundamentals are improving and getting better and better.

The story going around is that Uber is in turmoil, but I don't think that's the reality when you look at all the partnerships they have in the self-driving business. Yes, there are self-driving services that have just started to appear.

Companies like Waymo and Tesla are launching their services and expanding, but that doesn't mean Uber won't have a huge business, a business ten times bigger than it is today a decade from now .

So, I want to review exactly what that thesis behind Uber looks like. A large part of it is simply evaluation. You can see here that the price-to-earnings multiple on a tracking basis is only 15.

The price-to-free cash flow ratio is around 14. On a forward-looking basis, you are looking at very similar multiples.

So , business continues to improve. The stock price continues to fall. This is the kind of opportunity I'm looking for. Because when the feeling towards the stock changes, I want to have already built my financial position.

Here I will present all the information related to Uber today.

So, let's start by talking about Uber. I have previously stated that the assessment is very convincing. There are three things I typically look for in companies with asymmetric potential: Are they in a growth phase?

Is it working to double its business in the long term? So, you have revenue growth. Are there ways they can expand their profit margins? Is there a way to expand its complications?

So, with Uber's very attractive price multiples, it's certainly possible that these multiples will double, let's say, over the next ten years.

Furthermore, and probably most importantly, you have a continued cumulative growth of the business itself. So, let's delve into some of the most important figures. I'm actually going to start with these key performance indicators.

This is really important for a company like Uber because it removes some of the variance from quarter to quarter.

One thing that has changed recently for Uber is how it recognizes its revenue in certain countries. Therefore, those rules sometimes change. Typically, Uber does not consider total bookings as revenue.

So, if you spend $10 on a ride, that's the total bookings, but the revenue is actually what Uber keeps. So, it's usually around $2.50. However, there were some changes to the rules.

I believe that happened in the UK during the last year , where they effectively moved from reporting the total number of bookings as revenue to reporting the net number as revenue.

This makes revenue growth appear slower in the short term when comparisons are slightly different, but this does not actually mean that business is slowing down substantially.

But look at what happens with the monthly active customers on the platform. Are customers still choosing Uber? There is seasonality to this , so you usually get a kind of peak at the end of the year, but you can see that we have had steady growth since the September quarter of 2023.

The compound annual growth rate is 15%. This is a very good growth in the number of passengers on the platform.

The total number of flights also continues to rise . This growth is even faster. So, people are making more trips and ordering more things through Uber. Moreover, total bookings continue to rise.

Therefore, this would be the best measure of how healthy the business is, how much the business as a whole is growing, and how much money is coming into the system.

Now, just to illustrate how this comparison works with the revenue recognition I talked about earlier, the green column now is revenue. So, you can see revenues of $14.2 billion, and you can see that growth has slowed over the past two quarters.

So, what I 'm saying is that total bookings continue to rise, but as revenue recognition changes take effect in the system, the actual rate of revenue growth appears to be slower.

However, that will be made up for in 2027. So, there is really nothing to worry about.

The other great thing is that Uber is generating a large and stable free cash flow . This is the quarterly figure, actually. Let's look at this on a 12-month basis , and you can see that it is now generating more than $10 billion in free cash flow on an ongoing basis.

So, you are looking at a market value of $137 billion, which is 13.7 times the free cash flow on a 12-month basis. And remember, the core business continues to grow .

However, what worries the market now is the disruption that Uber is facing, especially from companies operating in the field of self-driving cars. So, YMO and Tesla would be the two big names that many investors believe will capture a share of the market.

However , Uber is also entering the field of self-driving cars. What they are doing is trying to turn their supply into a public good. Therefore, they do not perform vertical integration.

They use a standardized approach. Therefore, we will be the source of the demand, and then we will work with many different suppliers, and perhaps even provide some services to some of these suppliers.

So, let's review what has been announced since the last investor conference call ? We'll get an update on this later this week when the third-quarter figures are released, but Uber and Avolomo, if I pronounce it correctly, have received Spain's first national operating permit for Level 4 autonomous passenger vehicles . That was in early September.

Also in early September, Wave and Uber launched the first self-driving rides in the UK. In August, Uber launched Baidu's fully self-driving "Apollo" cars in Dubai. They have an independent global network of multiple partners worldwide.

Therefore, this provides more supply to one of the markets that has begun to develop very rapidly in the United Arab Emirates .

They announced in August that they were about to launch self-driving flights in Europe. This would have been done through the technology company Pony.ai and operated by Furne. And again , as part of the Pony.ai partnership, they are reportedly expanding that partnership to deploy more than 2,000 robot taxis in Europe.

Now , Uber management stated in their latest conference call that they will have a significant number of self-driving vehicles in operation by the end of 2026, and 2027 will be the year they begin to expand that process further .

This is a look at where they currently work . Seven cities were operational at that stage, with eight more to be launched by the end of 2026. So, you can see 15 cities . Expect this number to double, perhaps by 2027, with many different partners, many different hardware platforms, and self-driving technology companies.

Then the other big part we need to think about is who will actually operate these vehicles? Who will maintain the air pressure in the tires and keep the electric vehicles charged?

Who will clean the vehicles? All these things are like that . Uber may play a role in some of that, and Lyft has played a big part in it through their partnership in Nashville with Waymo.

But Uber is taking an approach of working with partners to do some of that. So, they will actually just be the technology layer. I think this is a very strong position for them.

So, if you add all that up, I don't think self-driving vehicles represent a disruptive story for Uber. Furthermore, they already have some interesting partnerships joining the platform.

In particular, this happened in September, when Costco expanded its nationwide delivery service with Uber Eats. So, once again, this is now network work, and work that depends on the network effect.

You want to have lots of suppliers and lots of customers, and you're just connecting them to each other.

The third part of that is that they have a lot of drivers. Most of these are human drivers today, but in the future, they may be self-driving vehicles. There is a lot of flexibility to bring new types of offerings to market, not just from different manufacturers or diverse technology companies, but what if the design is completely different?

What if the vehicle delivering the groceries looked different from the vehicle that picks you up to take you somewhere? There is nothing that requires these things to look exactly the same.

Uber has the flexibility to work with suppliers to achieve this.

So, in the long run, when you think about where this company will be in 5, 10, or 20 years , I think Uber is in a great position in the self-driving space because it's an app used regularly by hundreds of millions.

I think we will use it more and more. We will order more things . We will have more self-driving trips, because when there is no human in the process, not only will costs decrease, but riding in a self-driving vehicle will become more comfortable for many people.

So, if you combine all of that with the fact that this stock is very cheap today. I think the general perception of Uber will change. I don't know when that will happen, whether it's by the end of 2026 or in 2027, but I think as their operations improve, that's a company I'd like to own.

You have revenues that double year after year at a rate of approximately 20%. You have a huge target market, the potential to improve profit margins, and I think the multiple enabling factors will be amazing for this company.