The FTC wants Uber's pricing formulas. The earnings call is its first test
A 2-0 FTC vote on October 28 demands the inputs behind surge fares and algorithmic driver pay, with Uber's filing due in mid-December. The November 4 earnings call is where investors and the agency first hear the company answer.
Vincent Jiang · 3 min read
On October 28 the Federal Trade Commission voted 2-0 to order nine companies, Uber+0.19% — Uber, up 0.19 percent today among them, to hand over the "inputs, tools and procedures" behind how they set prices and gig-worker pay 1. The order is a Section 6(b) study: a broad FTC power to compel special reports for marketwide research that does not require any allegation of a specific violation, which is why the release names no wrongdoing and the FTC alleges no lawbreaking 15.
Responses are due within 45 days, putting Uber's filing in mid-December, and a company that refuses can be compelled in federal court 15. Uber reports Q3 on November 4, its first public chance to address any of this, with Wall Street looking for $0.86 a share on $14.67 billion of revenue 2.
The consumer side has a partial answer
A rider sees an upfront fare before booking, and prices can be explained as supply and demand. The order still asks whether a ride's price "varies from one person to the next" based on loyalty status or algorithmic analysis of personal data 1.
Driver pay is the harder half to defend
There is no posted rate and no negotiation: each offer is generated unilaterally by an algorithm, and the FTC says those offers may be personalized from drivers' own data, "such as their phone usage or acceptance history for past offers" 1. A driver who rejects too many low offers may see the next offer priced accordingly, a feedback loop no rider-facing fare has.
The August policy demands the basis, not just the fact
The FTC's proposed enforcement policy, published for comment in August, demands companies disclose not just that a price is personalized but the basis and data types behind it 15; legal analysts at Clark Hill note this inquiry extends the same logic, for the first time, to contractor compensation 5. On the call, management needs an answer to a narrow question: what inputs set a driver's offer, and could Uber disclose them without dismantling the supply algorithm that keeps cars on the road?
The market is betting the other way
Uber sits at 52-week lows, down 21% this year and under $135 billion in value, at 17x forward earnings against a 25x three-year average 3. Early investor Jason Calacanis bought 15,000 shares at $65 with a $120 target over two weeks, and lays out the split he expects: Tesla−1.17% — Tesla, down 1.17 percent today 40% of the autonomous-vehicle market, Uber at 35% with its 20-plus fleet partners, Waymo 15% 3.
Calacanis expects Tesla and Uber to take three quarters of the AV market
- Projected share of the AV market
- Estimate
Data
| Projected share of the AV market | |
|---|---|
| Tesla (estimate) | 40% |
| Uber (estimate) | 35% |
| Waymo (estimate) | 15% |
Getting back to the old multiple alone puts the stock near $96 3. Inference's earlier coverage framed this print as 22% bookings growth against 12% revenue growth and a bet on other people's AI [link: /article/uber-s-q3-report-must-reconcile-22-bookings-growth-with-12-revenue-growth]; what is new since is a regulator demanding the formulas underneath that growth 3.
Uber trades at 17x forward earnings, its lowest in three years
- Forward P/E
- Estimate
Data
| Forward P/E | |
|---|---|
| Today | 17x |
| 3-yr avg | 25x |
| $120 target (estimate) | 31x |
The competitive squeeze continues meanwhile
DoorDash's−2.97% — DoorDash, down 2.97 percent today $17 billion Instacart deal moves on without Uber, which walked from its own talks 3. DoorDash CEO Tony Xu promised Instacart members the same $9.99 DashPass price will cover both apps, folding a grocery membership into restaurant delivery 4. That shrinks a subscriber's reason to open Uber Eats, though analyst Dominick Miserandino of RTM Nexus counters the merger could also push Uber Eats to improve on price and fees 4.
The FTC study is the overhang the bull case has to carry: Uber's November 4 answers become the agency's first read on the formulas, and the 45-day clock runs to mid-December 12.
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