Uber posts first underlying profit since going public

Uber is also searching for ways to address fare hikes that have become commonplace over the last year

Uber's overall losses topped $2.4bn in the third quarter.

Uber Technologies has reported its first-ever adjusted profit as a public company, boosted by a recovery in ride-hailing and sustained demand in its delivery business.

Earnings before interest, tax, depreciation and amortisation was $8m (€7m) in the third quarter, Uber said. Analysts expected a loss of $15.4m.

When accounting for other expenses, though, Uber’s profits were non-existent. It recorded a net loss of $2.4bn in the period that ended in September. A write-down of its stake in China’s Didi Global drove the loss.

“While we recognise it’s just a step, reaching total-company adjusted Ebitda profitability is an important milestone for Uber,” chief financial officer Nelson Chai said.

The San Francisco-based company offered a conservative forecast for the fourth quarter. Adjusted earnings will be $25m to $75m in the period that ends in December, Uber said. Analysts expected $98.1m.

“The pandemic has been hard to predict and so we’re going to be a little bit prudent as we think about that,” Mr Chai said.

Ride-hailing was among the hardest-hit sectors during the pandemic as people shunned activities that involved coming in close proximity with strangers.  But rising vaccination rates and the US economy’s reopening are re-igniting rider demand. 

Gross mobility bookings grew 67% from a year earlier, driven in part by a rebound in airport rides, which surged 203% from a year ago. While riders are coming back, it’s been harder for Uber and Lyft to find enough drivers to meet that renewed demand, leading to higher fares and wait times for customers. 

Uber has spent hundreds of millions of dollars on incentives to lure drivers back after many resorted to government stimulus programmes for income, sought work elsewhere or are reluctant to return because of health concerns.

“Our early and decisive investments in driver growth are still paying dividends, with drivers steadily returning to the platform, leading to further improvement in the consumer experience,” chief executive Dara Khosrowshahi said.

Uber is searching for ways to address fare hikes that have become commonplace over the last year. Uber is “actively investing” in services like shared rides that can bring prices down, Mr Khosrowshahi said. 

However, increased costs of labour and inflation will keep them elevated for the foreseeable future, he said.

In the third quarter, revenue rose 72% to $4.8bn, the company said. That beat the $4.4bn analysts had projected. Uber said the number of active drivers in the US is up nearly 60% compared with the same period last year. 

The company also scaled back spending on driver incentives in the third quarter, which contributed to it reaching profitability. Lyft also has seen its prospects improve, reporting a 73% increase in revenue in the third quarter.

-Bloomberg