Revenue up, but Uber loses on investments

Company outperforms analysts' expectations to earn $8 billion

Uber on Tuesday reported record revenue in its most recent quarter and said more drivers and couriers were using its platform than ever before, suggesting that the company is emerging from a pandemic-fueled downturn in a far better position than it was two years ago. Still, Uber lost nearly $2 billion from its stakes in other ridehailing services.

The company outperformed analysts' expectations, shaking off concerns over high inflation to post $8 billion in revenue, a 105% surge from a year earlier, when the world was just emerging from pandemic lockdowns. Growth in Uber's ride-hailing business drove the increase, although its food delivery arm jumped 37% from a year earlier.

The record 122 million people using Uber each month accounted for a combined 1.8 billion trips in the April-to-June quarter, up 24% from a year earlier.

Uber's stock rose more than 13% in early trading Tuesday.

Uber said it had generated $382 million in free cash flow — its first positive free cash flow in a quarter, meaning it generated more money from its business operations than it lost. That's a milestone sought by CEO Dara Khosrowshahi as he tries to guide Uber toward consistently turning a profit. As the tech and business markets have cooled, Khosrowshahi has told his employees to cut costs and focus on profitability.

“I challenged the team to meet our profitability commitments even faster than planned, and the team delivered,” Khosrowshahi wrote in prepared remarks Tuesday.

Uber's strong results, on the heels of more mixed reports from other tech companies like Amazon and Microsoft, were not without blemishes. The company still lost $2.6 billion, including $1.7 billion from its investments in other ridehailing businesses like Aurora, Grab and Zomato.

But the company pointed to other positive signs. Although Uber has had to contend with high gas prices and is entangled in a variety of legal disputes across the United States over the employment status of its drivers, it now has nearly 5 million drivers around the world, a record number and a 31% increase from a year earlier.

On Friday, Uber said it would begin allowing drivers to see their destination and earnings for a trip before accepting a passenger, a change that the company said was aimed at giving its drivers

more flexibility and support. The new program, Upfront Pricing, has been tested in about 20 U.S. markets this year and will be rolled out to most of the country, except California and some other markets, in the coming months, said Alix Anfang, an Uber spokesperson.

On a call with investors Tuesday morning, Khosrowshahi pitched high inflation as a potential positive for the company.

He said that in a leaner, more cost-conscious environment, Uber's competitive advantages over its rivals like Lyft — such as its global reach and wide array of offerings that include both food delivery and ridehailing — would be more obvious.

“No one wishes for a tough economic environment or elevated inflation,” he said, but “there's no question that this operating environment is stronger for us.”

And he said drivers had been lured to Uber in part because of concerns about increasing grocery prices and other costs of living. The number of new U.S. Uber driver sign-ups in the quarter was up 76% from the same period a year ago, Khosrowshahi said, and more than 70% of those drivers said soaring inflation played a role in their decision to ferry passengers.