UBER Technologies reported revenue that beat analysts’ expectations, fuelled by a recovery in driver supply that supported increased ridership, assuaging investor concerns that rising inflation would damp consumer spending.

Third-quarter sales jumped 72 per cent to US$8.34 billion, the San Francisco-based company said on Tuesday (Nov 1) in a statement. That exceeded the US$8.1 billion analysts were expecting, according to data compiled by Bloomberg.

Gross bookings, which encompass ride hailing, food delivery and freight, increased 26 per cent to US$29.1 billion, slightly below the average estimate. Adjusted earnings before interest, tax, depreciation and amortisation reached US$516 million. Analysts, on average, projected US$458.7 million.

Uber’s “global scale and unique platform advantages are working together to drive more profitable growth,” chief executive officer Dara Khosrowshahi said in the statement. “Even as the macroeconomic environment remains uncertain, Uber’s core business is stronger than ever.”

Uber reported its ride-hailing driver base at the end of the period on Sep 30 was “on par with September 2019 levels,” and the increased driver engagement continued into October.

The improvement is a sign the company is moving past a protracted shortage of drivers that has also affected rival Lyft, resulting in higher fares and wait times for customers. Both ride-hailing giants have spent millions to lure drivers back to their respective platforms and recruit new ones to meet resurgent rider demand.

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After surging during much of the pandemic, Uber and other gig economy peers such as Lyft and DoorDash are navigating a challenging economy that includes US inflation rising to a 40-year high while the risks of a global recession loom.

The uncertainty has weighed on spending by advertisers and consumers, hitting tech giants like Meta Platforms and Amazon.com The gloomy outlook remains a risk for Uber, whose ride-hailing and delivery services carry a premium that customers may view more as a splurge than a necessity as budgets tighten.

Uber’s food-delivery arm, Uber Eats, generated US$13.7 billion in gross bookings during the quarter, a decline from the previous period, and missed the US$13.9 billion analysts expected.

The unit, which offers delivery across restaurants, groceries and alcohol, has grown to make up about 33 per cent of the company’s total revenue. Uber Eats initially benefited from the pandemic-induced boom in delivery and has more than doubled in size, based on bookings, from before Covid-19 emerged.

The increased scale has allowed the delivery business to become more profitable, posting a record US$181 million in adjusted earnings during the period.

“While the delivery category is one of the few ‘pandemic winners’ that continues to grow with a healthy top line, we welcome the newfound capital discipline amongst our peers,” Khosrowshahi said. “We will be measured with our investments, and will look to expand profitability while maintaining or growing our category position.”

Uber reached profitability on an adjusted basis for the first time in its history last summer and, earlier this year, Khosrowshahi pledged to reach US$2 billion in free cash flow.

One way the company plans to meet that target is by giving more attention to ads.

In October, Uber launched a dedicated advertising arm to monetise its audience of 124 million monthly active users and tap a higher-margin revenue stream. The company said the business reached US$350 million in run-rate revenue during the third quarter and affirmed its goal to reach US$1 billion in ad sales by 2024.

The company’s freight unit completed an integration with Transplace, which it acquired last year, and reported revenue of US$1.75 billion.

Bookings and adjusted earnings for the division missed analysts’ estimates amid weaker demand, spot volumes and rates that affected the logistics sector, Uber said.

Uber projected adjusted earnings before interest, tax, depreciation and amortisation in the current quarter of US$600 million to US$630 million, beating estimates of US$564.4 million. Gross bookings will be US$30 billion to US$31 billion in the period ending in December, in line with expectations.

The company recorded a net loss of US$1.2 billion, or 61 cents a share, attributed in part to its equity stake in Didi Global. BLOOMBERG