Uber posts stronger operating income as quarterly revenue doubles

Revenue was boosted in part by high ride-hailing prices, caused by an annual driver shortage in the US.

Tuesday’s results showed that the company’s efforts to cut losses while continuing to grow were paying off, although it still posted a net loss of $2.6 billion, largely due to accounting adjustments reflecting a drop in the value of its shares. to the Chinese giant Didi. Global Inc.,

DIDIY -3.53%

Grab Holdings Inc. of Southeast Asia and Aurora Innovation Inc.

Uber shares rose more than 10% in premarket trading.

The company said it generated free cash flow of $382 million in the quarter.

Uber said the rate of improvement in the underlying business may moderate. Activity on the platform so far this quarter suggests that bookings for delivery activities in the current period will be almost flat from the second quarter, it said. Deductions include Uber’s revenue and money that goes to others, such as drivers or restaurants.

The company forecast the total value of bookings on the platform to be between $29 billion and $30 billion in the September quarter, in line with Wall Street’s forecast of $30 billion and broadly on par with $29.1 billion in the June quarter .

One of its most closely watched financial metrics, adjusted earnings before interest, taxes, depreciation and amortization, will range between $440 million and $470 million in the current quarter, the company said. That’s a smaller improvement from the second quarter, but ahead of the $383 million Wall Street was projecting. This metric strips out certain expenses, such as asset write-offs and stock-based compensation that executives consider to be outside of a company’s core operations.

Uber’s bookings largely drove top-line growth in the most recent quarter, jumping 55% and underpinning the company’s stronger-than-expected operating income.

The company’s delivery unit, Uber Eats, is expanding beyond record-breaking business during the pandemic, but growth has slowed in recent quarters. Uber Eats’ bookings rose 7% last quarter, missing analysts’ forecasts. The unit’s bookings nearly doubled in the same quarter a year ago.

But Uber is making more money from its deliveries than before because of higher volume — due to its expansion into essentials and groceries — and lower delivery costs by bundling those items with food, the company said.

For a year, Uber and its competitor, Lyft, in ride share Inc.

they faced another challenge: there aren’t enough drivers to meet the growing demand for their rides. Labor shortages pushed up prices for rides and fares continued to remain high.

That may change, the company said. “We saw an acceleration in both active and new driver growth in the quarter,” CEO Dara Khosrowshahi said in prepared remarks. The company closed the second quarter with a record number of drivers and food couriers, he added.

Uber said that in July, wait times for riders and “snap trips,” which take effect when drivers are in short supply, were near their lowest levels in a year.

Neither Uber nor Lyft has said how many more ride-sharing drivers they need to meet demand.

Last week, Uber introduced a number of new features in an effort to sweeten the deal for ride-sharing drivers. One feature allows drivers to see earnings in advance, while another feature allows them to choose from a list of possible trips as opposed to sticking with the route Uber suits them.

High gas prices have also taken a toll on drivers. On Tuesday, Uber said 13.3 million trips were made in electric vehicles last quarter, quadrupling from the same period a year ago, though still a fraction of the 1.87 billion trips during the quarter.

Write to Preetika Rana at preetika.rana@wsj.com