Uber extends post-lockdown streak with strong rideshare and food delivery demand

Uber’s post-lockdown streak of strong bookings and revenue growth continued in the final quarter of 2022, as sustained food delivery demand and a rebound in the rideshare business brought earnings in line with Wall Street’s expectations.

Uber said that for the first time it surpassed 2bn trips globally in a single quarter, an average of almost 1mn trips per hour. Gross bookings — the total value of fares paid — in the mobility unit grew 31 per cent year-on-year.

Overall gross bookings, including from its delivery and freight business, grew 19 per cent to $30.7bn. Total revenue was up 49 per cent to $8.6bn, just over analyst expectations of $8.5bn, according to FactSet. Uber had warned previously that a stronger dollar would be a drag on earnings — on a constant currency basis, revenue would have been up 59 per cent.

The company said it had moved past its driver shortages that hampered its recovery in the early days following the lifting of Covid-19 restrictions. In the October-December period, there was a record high of 5.4mn drivers and couriers on Uber, it added.

For the first time, more than 100mn consumers used the company’s mobility services, which includes scooters, train bookings and taxi rides along with its core rideshare business.

Growth in bookings indicated a “stronger holiday travel season around the world”, said chief executive Dara Khosrowshahi in prepared remarks to investors. The company forecast gross bookings would grow 20-24 per cent in the current quarter, year-on-year.

“The pandemic’s impact on our mobility business is now well and truly behind us,” he added. “Our delivery business continued to show resilience, growing at a healthy rate while meaningfully expanding profitability and improving our category position in a majority of our large markets.”

However Uber’s nascent freight business was underperforming and suffered a “challenging” quarter, Khosrowshahi said, with weaker demand expected to persist this year.

In January, Uber announced it was cutting 150 jobs from the freight division. Revenue for the unit in 2022’s fourth quarter came in at $1.54bn, below the FactSet analyst consensus estimate of $1.68bn.

Uber’s preferred measure of profitability — adjusted earnings before interest, taxes, depreciation and amortisation — was $665mn, an $579mn increase on the same period in the previous year, and the sixth straight quarter of positive adjusted ebitda.

On a normalised basis, which discards the anomaly in how Uber accounts for revenue in the UK, the company’s “take rate” — the portion of fares or orders it keeps for itself — fell slightly from 20.1 per cent to 19.8 per cent. The company blamed the decline on fuel surcharges.

Adjusted ebitda in the current quarter is expected to land between $660mn and $700mn, the company forecast.

Net income was $595mn, boosted by a $756mn gain due to improved fortunes of Uber’s investments in China’s Didi and Singapore-based Grab.

“We ended 2022 with our strongest quarter ever, with robust demand and record margins,” Khosrowshahi said. “Our global scale and unique platform advantages position us well to accelerate this momentum into 2023.”