Uber expansion into underpenetrated markets could drive growth, analysts say

Uber Technologies Inc (NYSE:UBER, ETR:UT8) is poised for significant upside through geographic expansion, with analysts at Jefferies projecting that the increased adoption in underpenetrated markets could contribute approximately 4% to annual growth through 2030.

“Our analysis suggests tier 2+ markets would contribute 4% alone to annual growth over the next 5+ years,” the analysts wrote, reaffirming their ‘Buy’ rating and $100 price target, which implies 21% upside from Uber’s share price at the time of writing.

They highlighted that lower-tier markets represent just 20% of Uber’s total trips.

Even within the United States, Uber’s largest and most mature market, 45% of consumers still lack access to reliable on-demand services. 

Uber’s recent performance reflects this expansion push, according to the analysts.

UBS attributed Uber’s recent strong growth to rapid expansion into underpenetrated markets, with the number of cities served rising from over 10,000 in 2023 to more than 15,000 expected by the end of 2024, and plans for further growth in 2025.

“In Mobility, the company is focused on unlocking driver supply through targeted investments in driver incentives, leveraging products such as Reserve, and enhancing marketplace tech,” they wrote.

“Uber is also leaning into alternative forms of supply such as taxis, most recently evidenced by the acquisition of Denmark's largest operator.”

AV deployments critical

Jefferies emphasized that market expansion will remain a critical source of Uber’s growth, supported over time by expanded autonomous vehicle (AV) delivery.

“We believe the proliferation of low-cost autonomous vehicles will be critical for penetrating tier 2+ markets,” they wrote.

The firm raised its 2026 bookings and earnings before interest, taxes, depreciation and amortization (EBITDA) estimates by 2% and 4%, respectively, noting these projections now sit further above the Street consensus.

Despite the bullish long-term view, Jefferies highlighted Tesla’s planned robotaxi launch in Austin on June 12 as a potential short-term risk.

“The launch has no influence on our view that Uber is the most likely consolidator of AV demand,” the firm wrote, but noted it could pose a “potential near-term overhang.”