Uber Technologies reported revenue that beat analysts’ estimates, buoyed by robust demand from customers who continued to offer rides and order takeout despite rising inflation. Shares are up about 11 percent in early trading.
Sales more than doubled to $8.1 billion (€7.9 billion) in the second quarter, the company said in a statement. That topped the average analyst forecast of $7.4 billion, according to data compiled by Bloomberg.
“Over the past quarter, I challenged our team to deliver on our profitability commitments even faster than planned – and they delivered,” said Chief Executive Officer Dara Khosrowshahi.
In the three months ended June 30, Uber’s reported gross bookings, which include ride-hailing, meal deliveries and freight, rose 33 percent to an all-time high of $29.1 billion.
Uber reported that 122 million people used the platform monthly, beating the 120.5 million expected by analysts. Mr Khosrowshahi said the number of consumers and earners using Uber is now at record levels.
Uber and gig economy rivals like Lyft and DoorDash are facing inflation levels that are the highest in four decades and the prospect of an economic downturn that could dampen demand just as they recover from rocky months of shutdowns began to recover from Covid.
At the same time, aggressive rate hikes by the Federal Reserve have resulted in unprofitable companies like these falling out of favor with investors.
Uber shares fell 43 percent this year through Monday’s close, while Lyft lost 67 percent of its value. Lyft reports results tomorrow.
Mr Khosrowshahi said in May the company was “recession-resistant” but had nevertheless taken steps to keep costs under control by treating “hiring as a privilege”. Lyft also said it plans to significantly slow hiring and cut costs.
Uber, which has struggled with an ongoing driver shortage for the past year, has gradually scaled back the extra spend on rewards and incentives it had to offer to lure people back. Instead, the company has focused on improving its app by allowing drivers to see a fare and a passenger’s destination.
The imbalance between drivers and passengers has resulted in longer waiting times and higher fares for customers. Rising fuel prices have prompted motorists to reduce the number of hours they drive.
A key advantage over competitor Lyft is Uber’s grocery delivery service, Uber Eats, which has boomed during the pandemic, as has demand for ridesharing. Uber’s delivery arm, including restaurant, groceries and alcohol, saw bookings increase 7 percent year over year to $13.9 billion. This missed the $14.4 billion expected by analysts.
https://www.independent.ie/business/world/uber-shows-resilience-as-market-context-changes-41885462.html Uber has shown resilience when the market context changes