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14th May 2022

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Uber leans on delivery business as rideshare demand remains flat

Uber claimed it was “starting to fire on all cylinders” with its highest-ever quarter of gross bookings, though its food delivery business continues to do the heavy lifting with ride-hailing bookings flat.

Uber recorded $19.5bn in gross bookings — the total value of all transactions — up 24 per cent on the same period last year, when the early effects of the pandemic had started strangling its business.

But bookings for rideshare were down marginally on the previous quarter, and still 38 per cent lower on the same period a year ago.

A shortage of available drivers has hampered the sector’s recovery. For the first time, Uber disclosed on Wednesday that it had 3.5m active drivers and couriers working on its platform, up 4 per cent on the previous quarter but down 22 per cent year-on-year.

Revenue for the quarter came in at $2.9bn, below analysts’ estimates. That included a $600m accrual for costs it expects to bear in future to settle historical wage claims in the UK related to a landmark court defeat over worker classification that will see drivers in the country gain extra benefits.

Discounting the accrual, Uber said its total revenues were $3.5bn, up 8 per cent year-on-year, exceeding analyst estimates. As has been the case for most of the pandemic, its delivery division accounted for the bulk of sales, at $1.7bn, a 230 per cent increase from the first quarter of 2020.

A one-off $1.6bn windfall from the sale of its self-driving division helped Uber come within touching distance of a profitable quarter, recording a net loss of $108m compared to $2.9bn in the same quarter a year ago.

Uber’s preferred measure of performance, adjusted ebitda earnings before depreciation and amortisation, also came in ahead of analysts’ expectations, with a $359m loss, 41 per cent higher than a year ago. Wall Street had expected a $452m loss, according to FactSet.

“Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings,” said Dara Khosrowshahi, chief executive, in a statement accompanying the filing.

On Tuesday the company announced it would partner with rapid app delivery company Gopuff to offer convenience items through the Uber Eats app, using Gopuff’s network of warehouses and delivery drivers. Uber takes an undisclosed commission on each sale.

Uber is maintaining its target of a profitable quarter, on an adjusted ebitda basis, by the end of the year. Rideshare demand is showing signs of a strong return in regions that have loosened lockdowns and vaccinated citizens.

As part of its earnings release, Uber shared data from Sydney and New York, two of its largest markets for rides and delivery, suggesting that food delivery gross bookings were still elevated even after reopenings, which boosted rideshare demand.

Rideshare workers across the board have shown a reluctance to take up the job as economies reopen.

Last month Uber announced a $250m “stimulus” package of additional incentives for drivers, touting higher organic wages as high demand pushed up fares. On Tuesday, rival Lyft touted higher earnings and a greater degree of social interaction for rideshare drivers compared to dropping off food.

There were 98m active users of Uber, whether for rides or food — a 5 per cent increase from the previous quarter but 5 per cent lower than the same period last year.

2021-05-05 20:53:10


www.ft.com


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