Uber loss narrows as it hopes to rev shared rides
Uber on Wednesday reported that it narrowed its quarterly loss by selling its self-driving tech unit and said its pandemic-battered ride share business is starting to regain speed.
The San Francisco-based company said its net loss in the recently ended quarter shrank to $108 million, with help from the sale of its automated driving unit for $1.6 billion. A year ago, Uber's loss was a staggering $2.9 billion.
Overall bookings at the company grew 24 percent to $19.5 billion, driven by strong growth in its Uber Eats delivery unit.
The mobile unit that includes smartphone-summoned car rides saw gross bookings of $6.8 billion, down some 38 percent from the same period last year, the earnings report showed.
Overall bookings at Uber topped expectations, with ridership improving during the quarter, according to chief financial officer Nelson Chai.
"Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings," Uber chief executive Dara Khosrowshahi said in the earnings release.
Uber shares dove more than 4 percent in after-market trades that followed release of the earnings figures.
"As we move out of the depths of the pandemic, Uber's business is on a clear path to recovery," said eMarketer analyst Eric Haggstrom.
"However, as countries emerge from lockdowns, consumer demand as well as driver supply are major for their delivery businesses."
- Drivers wanted -
Last month, Uber said it was adding some $250 million as a "stimulus" to help get more drivers on the road to meet growing demand for rides.
The sum will be used to boost US-based driver earnings, which are already higher than usual due to less competition from peers at the service, according to Uber.
Luring drivers back to the service is a top priority at Uber, Khosrowshahi said on a Wednesday earnings call.
Uber research found that among drivers who abandoned the service last year, top concerns were the risk of Covid-19 and a dearth of paying fares, according to its chief.
However demand for Uber rides is now outpacing supply in the United States, resulting in unprecedented earnings opportunities in some cities where drivers are topping $30 an hour, Khosrowshahi said.
Uber's earnings report came as the US Labor Department blocked a rule handed down under former president Donald Trump that would have prevented gig workers from demanding a minimum wage or overtime.
The rule, finalized in January just before Trump was replaced as president by Joe Biden, would have made it easier to classify drivers for ride-hailing services like Uber and Lyft, or delivery workers for companies like DoorDash, as independent contractors, rather than employees.
"By withdrawing the Independent Contractor Rule, we will help preserve essential worker rights and stop the erosion of worker protections," Labor Secretary Marty Walsh said Wednesday.
During the mass layoffs caused by the Covid-19 pandemic, the government launched a special program to provide jobless benefits to gig workers, since they are not eligible for regular state unemployment payments.
Rideshare companies Uber and Lyft strongly opposed the Labor Department's latest move, saying it would undermine their business model.
They have maintained that, according to their surveys, their drivers prefer to be independent contractors.
Uber chief legal officer Tony West said during the earnings call that he saw "a real opportunity for dialogue" with US labor officials on a way to provide drivers with benefits while preserving the gig worker model.
"Independent workers want to stay independent," Khosrowshahi said.
"Flexibility and benefits are the answer going forward, and we hope to have that conversation."
Last November, Uber, Lyft, DoorDash and other app-based, on-demand services won a battle at the ballot box in California when voters passed a referendum known as Proposition 22, which effectively overturned a state law requiring them to reclassify their workers and provide employee benefits.