Uber’s ride-hailing business recovers as rival Lyft struggles

Uber’s ride-hailing business made a strong recovery in the first quarter, offering a rosy outlook on growth following the pandemic, in stark contrast to smaller rival Lyft, which has reported disappointing results.

The San Francisco-based company forecast on Wednesday that underlying profits were also likely to grow ahead of Wall Street’s forecasts for the second quarter.

Uber’s results come after shares in Lyft fell 25 per cent in pre-market trading on Wednesday, after reporting revenues and profits below investors’ expectations.

Both companies have struggled with a shortage of drivers, which has constrained a rebound as Covid-19 restrictions on movement have eased in their main markets.

Uber reported revenue growth of 136 per cent to $6.9bn for the first quarter, with adjusted earnings before interest, tax, amortisation and depreciation of $168mn, both of which were better than analyst forecasts.

“After more than two years of persistent and sometimes unpredictable impacts to our business, our [first-quarter] results make clear that we are emerging on a strong path out of the pandemic and that the power of our platform is differentiating our financial performance,” said Dara Khosrowshahi, Uber’s chief executive.

However, net losses at the group leapt from $108mn a year ago to $5.9bn, largely because of unrealised losses related to its minority investments in Grab, Aurora and Didi, as lossmaking tech companies have seen their stock prices pummelled by investors in recent months.

For the second quarter, Uber forecasts ebitda of between $240mn and $270mn on gross bookings of $28.5bn to $29.5bn, both of which were broadly better than Wall Street had anticipated.

Uber said “strong mobility demand” had helped the company push past its own forecasts for profitability and bookings, momentum that has continued into the second quarter.

“Just last week, we reached an all-time high for total company gross bookings, with strength across both lines of business,” Khosrowshahi said.

Uber’s stock was about 1 per cent higher at $29.75 in pre-market trading.

Rapid growth in Uber’s food delivery business helped sustain it through the pandemic when customers were moving around less, but the two main sides of its business are now roughly equal in size. Mobility revenues for the first three months of the year rose 195 per cent to $2.52bn, while delivery increased 44 per cent to $2.51bn.