Uber reports first quarterly profit as rides recover

Total revenue grew 72 percent to $4.8bn, but losses remain high due to the company’s Didi holding.

Revenue at Uber's mobility unit, which includes its rides business, grew 62 percent to $2.2bn from last year [File: Hannah McKay/Reuters]

Uber Technologies Inc on Thursday reported its first profitable quarter on an adjusted basis since it launched more than a decade ago with its two most important segments, ride hailing and restaurant delivery, both turning the corner.

Uber said consumers were travelling in greater numbers and drivers had returned to its platform in the third quarter, suggesting its massive payments to incentivise drivers had paid off.

The California-based company reported adjusted earnings before interest, taxes, depreciation and amortisation, a measure that excludes one-time costs, primarily stock-based compensation, of $8m for the quarter ended September 30. That compared to a loss on the same basis of $625m a year ago.

But Uber posted a growing net loss of $2.4bn, driven primarily by a drop in value of its holding in Chinese ride service Didi and stock-based compensation. Total revenue grew 72 percent to $4.8bn, above an average analyst estimate of $4.4bn, according to IBES data from Refinitiv.

Revenue at its mobility unit, which includes its rides business, grew 62 percent to $2.2bn from last year. Revenue was up 36 percent on a quarterly basis and unit margins returned to levels seen before the coronavirus pandemic.

Uber Chief Executive Dara Khosrowshahi in a statement said this year’s Halloween weekend surpassed 2019 levels, suggesting Americans were eager to go out.

United States airport trips, among the most profitable routes in the industry, increased in recent weeks and were up 20 percent from the beginning of September, while business trips increased 60 percent, Uber said. Uber Chief Financial Officer Nelson Chai in a statement said the company’s core restaurant delivery business was profitable in the third quarter for the first time on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) basis.

Uber’s monthly active driver and courier base in the US has grown by nearly 640,000 since January, but the company did not provide data on how driver numbers compared to pre-pandemic levels.

Uber’s delivery unit, largely made up of the company’s Eats business, continued its success streak, but gross bookings were largely unchanged from the second quarter.

Delivery, which includes restaurant and store deliveries, overall reported an adjusted EBITDA loss of $12m, bringing the unit close to breakeven.

Delivery emerged as Uber’s pandemic backbone. Steady delivery bookings signal the rebound in rides has not come at the expense of food delivery, with consumers sticking to the service even as the economy reopens.

Uber’s earnings follow stellar results by smaller US rival Lyft Inc, which on Tuesday reported its second consecutive quarterly adjusted profit and outlined its path to sustained profitability.

Source: Reuters