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Uber Technologies reported revenue that beat analysts’ estimates, boosted by resilient demand from customers who continued to hail rides and order takeaway food despite rising inflation.
Revenue more than doubled to $8.1bn in the second quarter, the company said on Tuesday in a statement. That beat the $7.4bn average projection from analysts, according to data compiled by Bloomberg.
“Last quarter I challenged our team to meet our profitability commitments even faster than planned — and they delivered,” CEO Dara Khosrowshahi said in the statement.
In the three months ended June 30, Uber reported that gross bookings, which encompass ride hailing, food delivery and freight, increased 33% to an all-time high of $29.1bn. Adjusted earnings before interest, tax, depreciation and amortisation rose $873m to $364m, far exceeding expectations.
Uber reported 122-million people used the platform monthly, surpassing the 120.5-million analysts expected. Khosrowshahi said the number of consumers and earners using Uber are both now at a record.
Uber and US gig economy peers such as Lyft and DoorDash are confronting inflation levels that are the highest in four decades and the spectre of an economic downturn that could damp demand, just as it was starting to recover after the rocky months of Covid-19 shutdowns. At the same time, aggressive interest rate increases by the US Federal Reserve have made unprofitable companies such as these very much out of favour with investors.
Uber shares declined 43% in 2022 through Monday’s close, while Lyft has lost 67% of its value. Lyft reports results on Thursday.
Khosrowshahi said in May the company is “recession resistant”, but it has still taken steps to keep costs in check, by treating “hiring as a privilege”. Lyft also said it plans to significantly slow hiring and cut expenses.
Uber, which has struggled with a persistent shortage of drivers over the past year, has gradually decreased the extra spending on bonuses and incentives it was forced to offer to lure people back. Instead, the company has focused on improving its app by unlocking drivers’ ability to see a fare and a passenger’s destination. The imbalance between drivers and passengers has led to longer wait times and higher fares for customers. Rising fuel prices have led drivers to cut down on the number of hours they are on the road.
A key advantage against rival Lyft is Uber’s food delivery business Uber Eats, which boomed during the pandemic just as ride-hailing demand cratered. Uber’s delivery arm, including restaurant, grocery items and alcohol, saw bookings increase 7% from a year ago to $13.9bn, missing the $14.4bn analysts were expecting.
Uber projected gross bookings of $29bn to $30bn in the third quarter and adjusted earnings before interest, tax, depreciation and amortisation of $440m to $470m. That beat expectations of $391.6m.
In the second quarter, Uber recorded a net loss of $2.6bn, or $1.33 a share, due to unrealised losses from stakes in Grab, Aurora Innovation and Zomato.
BloombergMore stories like this are available on bloomberg.com
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