Uber Records Rare Profit Thanks to Stake in Didi
Uber is recovering from the pandemic and subsequent driver shortages, the company said on Wednesday. The company’s second-quarter revenue rose 105% from the same period last year to $ 3.9 billion, slightly higher than analysts expected. Uber also posted a rare profit of $ 1.1 billion, thanks to the initial public offering of Chinese rideshare company Didi, in which Uber holds an 11% stake.
Excluding this one-time gain, Uber said its adjusted losses were $ 509 million. Uber last reported profit in the first quarter of 2018, when it sold part of its business in overseas markets where it faced challenges. The company remains on track to meet its adjusted profitability target in the last three months of 2021, Nelson Chai, its chief financial officer, said in a statement.
Uber’s share price has fallen around 8% after-hours, due to the decline in the value of its stake in Didi as the company faces regulatory pressure in China.
Uber and other ridesharing companies still face uncertainty as the Delta variant causes an increase in Covid-19 cases in the United States and elsewhere. Uber’s food delivery business, Uber Eats, provided a lifeline for the business during previous shutdowns, when customers stopped shopping but started ordering more food.
Passengers returned to Uber this spring faster than drivers, resulting in long wait times and higher prices. To encourage drivers to return to the platform, Uber has increased incentives and bonuses. Uber also said it has temporarily lowered the amount it levies on calling rates to 18.7%, from its usual rate of around 20-25%.
The move worked, according to Uber chief executive Dara Khosrowshahi. “We have invested in the recovery by investing in drivers, and we have made great strides, with monthly active drivers and couriers in the United States increasing by almost 420,000 from February to July,” Khosrowshahi said in a statement.
Uber said it has attracted 101 million monthly active consumers.
On Tuesday, Lyft, Uber’s biggest competitor in the United States, said it had second quarter revenue of $ 765 million, a 125% increase from the previous year. The company reduced its losses to $ 251.9 million from $ 437.1 million and attracted 17 million active passengers, an increase of almost 97% from the same period a year ago.
Lyft attributed the growth to its recovery from the peak of the pandemic and said it had met its adjusted profitability target.
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