There's one word likely to dominate Uber's earnings report. Here's why anxious investors are so keen to hear it.

Johannes Eisele/Contributor/GettyUber CEO Dara Khosrowshahi on the floor of the New York Stock Exchange during the company's IPO in May 2019.

• Uber will report its fourth-quarter 2019 earnings on Thursday following the closing bell.
• Wall Street expects the ride-hailing giant to remain deeply unprofitable, while slowly shoring up its bottom line.
• The industry is quickly becoming more "rational," analysts say, as Uber and Lyft wean customers off coupons and discounts they used to grow over the past decade.
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There's one topic executives at Uber - and even its smaller competitor Lyft - can't seem to talk enough about.

Both companies are trying to wean riders off the discounts and coupons that flooded the market as the ride-hailing services fought for market share ahead of going public in 2019. That's a long way to describe what insiders are calling rationalization.

And on Uber's fourth-quarter 2019 earnings report on Thursday afternoon, that process of raising prices to help shore up a deeply red bottom line is likely to be at the top of anxious investors' minds.

Wall Street analysts polled by Bloomberg expect the company to lose an adjusted $0.60 per share on revenues of $3.7 billion. Those numbers would represent roughly a 10% improvement from the third quarter on both measures.

Following the mixed third-quarter numbers expectations, chief executive Dara Khosrowshahi assured analysts that rationalization was coming, possibly even sooner than expected.

"The rides rationalization has happened much faster I think than anyone expected and we have a ton under our own control as far as our own business model how we use technology and automation to drive per unit margin," he said. In total, the r-word came up 17 times on the call.

But it takes two to tango.

Lyft, which only competes with Uber in the United States and only on ride-hailing (not Eats, flying cars, or anything else), said things have been a little more sticky than they'd like.

"We took a little bit of risk for the first time and led the market in two small, modest pricing increases over the last couple of quarters," Logan Green, Lyft's chief executive, said at a conference in December.

For the most part, those were matched by the competition, he said without naming names (but heavily implying Uber). But when it came to ending the coupons that hit customers' inboxes and apps on a seemingly weekly basis in some markets, things were different.

"We sort of attempted to do the same thing in terms of couponing and lead in creating a more rational market," Green said. "We have not seen that matched. So we're going to change our stance, and we'll sort of revert to a match and follow position."

Despite the high-stakes game of chicken, Wall Street remains overwhelmingly positive on both names, and expects a decent print from Uber on Thursday.

"US rideshare has seen faster-than-expected rationalization as both Uber & Lyft look to drive profitability," analysts at JPMorgan said in January as they launched coverage of Uber with an overweight rating. The team also liked the company's focus on a "super app" to contain all its services and diverse investments into new bets like self-driving cars, freight, and bikes and scooters.

"Uber is the global leader in two secular growth industries, ridesharing and food delivery, and is leveraging its massive scale and technological expertise to rapidly launch and scale new products in 60+ countries," JPMorgan continued.

All eyes on Eats

In November, Uber told investors it hopes to be either the top or second player in any delivery market as it expands Eats. " If we can make it to that level," CFO Nelson Chai said, "we'll look to dispose, or will get out of the market."

In India, Uber sold its delivery operations to the local competitor Zomato for a nearly 10% stake in the business, worth $250 million. The news excited investors and analysts, sending shares up 6% in trading and soliciting many a positive research note.

Eats as a standalone business line, meanwhile, continues to post double-digit percentages of revenue growth, making it one of Uber's fastest-growing segments.

That boost has helped the stock regain some of its footing following a massive decline since going public last May. Shares are now down just 4% from initial trading prices as the industry continues to, you guessed it, rationalize.

Cost-cutting efforts like two rounds of layoffs have helped too (though hiring doesn't appear to be slowed as Uber scales up new offices in Dallas and Chicago).

"UBER's collection of global businesses increasingly look poised to scale into the next large cap multisided marketplace (transportation-as-a-service) with improving economics and flywheel effects on both the supply & demand side of the platform," UBS analysts said in January.

"While debates will likely persist over the form/structure/path to the end goals of scaled market leadership (via platform economics) across a number of end demand verticals (transport, food, logistics, autonomous) and value optimization of its non-core asset portfolio, we see a management team committed to unlocking asset value and a compelling risk/reward in the stock from current levels."

Axel Springer, Insider Inc.'s parent company, is an investor in Uber.

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