Uber claws back business as lockdowns ease but misses target

Uber missed Wall Street forecasts as the pandemic weighed on the company’s ride-sharing revenues, although it said its business came back “steadily” as countries loosened restrictions on travel and socialising in the third quarter.

The company narrowed its losses in the quarter to $1.09bn, marginally worse than a consensus of analysts’ estimates of $1.02bn, according to data from S&P Capital IQ. Overall revenue, down 18 per cent, was also slightly worse expected.

Uber’s ride-sharing business recovered 94 per cent on the previous quarter, the company said, but was still down 53 per cent year-on-year.

Recovery has been tied closely to regions where lockdowns had been partially lifted, particularly in Europe. Some restrictions have been reintroduced in some countries since the end of the third quarter, but Uber reiterated its target of a profitable quarter — before interest, taxes and depreciation — some time in 2021.

The company’s stock price was down slightly in after-hours trading.

Uber’s overall gross bookings in the third quarter, down 10 per cent year-over-year, were helped by continued strong demand at its Uber Eats food delivery business. Revenues for the delivery business were up 125 per cent on the same period last year, an acceleration from 103 per cent growth in this year’s second quarter.

In the UK, Uber said it was expanding its business in areas outside London, and claimed to have closed the gap in food delivery with Just Eat Takeaway. Chief executive Dara Khosrowshahi said, based on the number of individual deliveries, Uber Eats was now 30 per cent smaller than its main rival, compared with about 60 per cent a year ago.

Globally Uber said it had increased the selection of restaurants on its app by 70 per cent in the past year.

“Despite an uneven pandemic response and broader economic uncertainty, our global scope, diversification and the team’s tireless execution delivered steadily improving results,” Mr Khosrowshahi said.

The earnings were announced just days after Uber and its gig economy peers won a pivotal victory in California, where voters backed a new law allowing them to keep treating their workers as contractors rather than employees with full benefits.

Uber is expected to push for similar measures in other states, removing a significant degree of uncertainty around the future of its business model.

“This important question has now been settled in the most populous state in the country,” Mr Khosrowshahi said.

The Uber chief executive added that the company was seeing an “undersupply” of drivers in relation to the demand from riders as people became more comfortable travelling with strangers and business rebounded from the pandemic collapse.

“It takes time,” he said. “These are human beings and what’s happening outside is very tough. The driver supply coming back is a bit slower than we would want.”

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