Uber Technologies Inc. (NYSE: UBER) inches up in pre trading session on Thursday as the company reported revenue that exceeded analysts’ expectations, indicating that rising inflation hasn’t deterred consumers from ordering more takeout or hailing a ride.
Revenue increased 49% to $8.6 billion in the fourth quarter, according to a statement issued by the San Francisco-based company on Wednesday. According to Bloomberg data, this exceeded the $8.5 billion forecasted by analysts. Gross bookings, which include ride hailing, food delivery, and freight, rose 19% to $30.7 billion, as expected.
“We finished 2022 with our strongest quarter ever, with robust demand and record margins,” said CEO Dara Khosrowshahi in a statement.
Uber’s report stands in stark contrast to much of the technology sector, which has seen behemoths like Microsoft Corp. and Alphabet Inc., as well as gig-economy rivals like DoorDash Inc. and Lyft Inc., lay off workers and scale back in response to a more uncertain economic outlook. Uber cut thousands of jobs in the early stages of the pandemic in 2020, but has recently stated that it has no plans for widespread layoffs. Uber’s headcount is expected to remain flat in 2023, according to Chief Financial Officer Nelson Chai during a conference call with analysts on Wednesday.
Earnings before interest, taxes, depreciation, and amortization were $665 million, exceeding the analyst consensus of $619.4 million. Profits were boosted by “significant reductions” in driver bonuses and higher-margin revenue from the food delivery advertising business.
Uber’s monthly active users increased 11% to 131 million, slightly less than what Wall Street expected. Nonetheless, total trips increased dramatically as customers requested rides more frequently. “The impact of the pandemic on our Mobility business is now well and truly behind us,” said Khosrowshahi. Uber’s ride-share bookings increased 31% to $14.9 billion, surpassing delivery bookings for the first time since the pandemic began.
The company reported that its ride-hailing driver base was at a “all-time high,” indicating that it has overcome a persistent driver shortage that resulted in higher fares and longer wait times for customers for much of last year. According to data from Gordon Haskett Research Advisors, which surveys ride-share prices in 30 US cities, the average price of an Uber ride was $13.91, 5% lower than last year, while Lyft fares fell 1%.
Uber Eats, the company’s food-delivery arm, generated $14.3 billion in gross bookings during the quarter, exceeding the $14.2 billion expected by analysts. According to D.A. Davidson analyst Tom White, the unit accounts for 47% of Uber’s total revenue, and newer services such as grocery, convenience, and alcohol delivery could help drive future growth.
According to Khosrowshahi, Uber’s subscription service, Uber One, doubled in members last year to around 12 million. The product has assisted Uber in retaining more customers and keeping them returning to order or hail a ride more frequently. Subscription members account for roughly 40% of delivery gross bookings in the United States.
Uber Freight, the company’s logistics arm, faces a more difficult outlook as the trucking industry slows. The division, which operates as an independent unit, connects trucking companies with those looking to transport loads. Uber Freight announced in January that it would lay off 3% of its workforce.
