An earnings UbermenschUber’s earnings had its share price on a ride, but there’s still a few bumps on the road it needs to watch out for.
- Uber’s share price surged by more than 12% yesterday, after its quarterly earnings report showed its revenue to be up 72% YoY at $8.34bn. Its adjusted earnings were also the strongest they’ve ever been at $517m.
- The transport company chalked its quarterly success up to more people using the app last quarter, with the number of bookings made during Q3 growing 26% from the previous one. Although at $29.12bn, its gross bookings still came in short of analyst expectations of $29.63bn.
- Despite the jump in share price, it’s not all flowers and rainbows for Uber. The group still posted a $1.2bn loss for the quarter, and predicts that growth in bookings will begin to slow in the coming months. Still, in the current economic climate, every success is worth celebrating.
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Is the gig economy out of gambits?The largest gig economy companies in the US may need a side hustle of their own after new rules from the White House send shares plunging.
- The US Labor Department is revisiting worker rules, and the latest set of proposed changes could shake up the gig economy big time. The Biden administration’s new rule would make it far more likely that gig workers should be classified as employees instead of independent contractors, complete with workers comp and all.
- Investors in brands with a reliance on gig workers took the news to heart and spent Tuesday trading sharply down. Uber was down 16% at one point in day trading before closing down over 10%, Lyft lost over 12%, and DoorDash sank 6% – the employee vs. contractor debate isn’t a new one, and stocks are v sensitive to any news on this topic.
- Profitability is essentially at the core of the fears. Many of these companies need gig workers to make their business model work, and given most of them have yet to reach profitability in the friendliest of environments, they’re even less likely to do so when faced with the potential increased wage costs that would arrive if these proposals become law.
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Uber’s 5* ratingInvestors drive straight past the murky waters of Uber’s sinking investments to focus on the glistening landscape of the brand’s first-ever cash flow positive quarter.
- Uber stock shot up by just under 19% on Tuesday, hitting its highest levels since early May and marking its best day in over two years. After burning through over $25bn since its founding 13 years ago, Uber finally reported $382m in free cash flow, with revenues increasing 105% to $8.07bn and far outpacing estimates – competitor Lyft popped 16% in excitement too.
- An increase in on-demand transportation has boosted the balance sheet. After relying heavily on its food delivery biz in the pandemic, its mobility revenues – which saw a 57% jump in gross bookings – outweighed its UberEats revenues for the second straight quarter. In addition, after months of struggling to attract drivers, active and new driver growth accelerated this quarter despite crazy high fuel costs.
- The ride-sharing company still reported a loss of $2.6bn, but $1.7bn of that was down to its stakes in Aurora, Grab, and Zomato – investments the company is reported to be reevaluating rn. For the current quarter, Uber expects gross bookings of up to $30bn, but has warned that its growth may moderate as the economy continues to slow.
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Uber’s ‘dark tricks’Uber’s wheels are spinning as it tries to get out of a political controversy, but its share price just gets more stuck in the red with every effort.
- Uber shares sank over 5% on Monday after a whistleblower prompted a report about the “dark tricks” Uber used to get a foothold in the European markets between 2013 and 2017, and investors aren’t happy. This isn’t the first time Uber has been caught at the center of a controversy and has been working hard to get its street cred back, so this isn’t what they needed.
- Over 124k confidential documents were leaked to the Guardian by a former top exec at Uber, outlining how Uber used “stealth technology” to block government scrutiny, how it courted European politicians like Emmanuel Macron, who reportedly reformed laws in the firm’s favor and helped them disrupt the taxi industry, and how its CEO at the time said “violence guarantees success” in reference to driver protests.
- Uber has tried to quell the rage that the “Uber Files” induced, but without much success. Founder Travis Kalanick resigned as CEO in 2017 after months of turmoil, and successor Dara Khosrowshahi is determined that Uber’s "past behavior wasn't in line with present values" and it’s a "different company" today.
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Food deliveries get lost in the AmazonLeaders of the food delivery space weren’t feeling so fresh today after hearing that a giant conglomerate is coming for their lunch.
- Amazon and Grubhub are teaming up to take on food delivery. The e-commerce giant secured the right to buy a 2% stake in the brand and will offer no-fee access to its delivery services for US Prime members as part of its push into food delivery, echoing a similar deal it made with UK food delivery service Deliveroo.
- It’s not good news for delivery giants Uber and DoorDash, who had had hopes of creating a duopoly over food delivery in the US. There are nearly 150m Amazon Prime members in the US, so there are a lot of people who could find free delivery too tempting to resist and make the switch.
- Uber shares fell 4.5% on Wednesday after hitting their lowest levels since March 2020 last week, and DoorDash shares sank 7.4% and are trading around all-time lows. Meanwhile, both Amazon and Grubhub owner Just Eat Takeaway.com saw shares rise on the day. May the best delivery service win.
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Uber gets caught in trafficUber’s earnings prove that the ride-sharing biz is back in full swing, but it gets dragged down on the day by Lyft’s losses and a massive investment hit.
- Shares reversed 4.6% on Wednesday to near a two-year low despite boasting a Q1 beat and surging revenues. The platform reported LPS of $0.18 on revenues that were up a whopping 136% to come in at $6.85bn, but ridesharing sentiment was waaay down in the market after Lyft cratered 30% on an earnings miss the same day.
- Its mobility biz has officially recovered from covid, overtaking its delivery segment for the first time since the pandemic and exceeding 2019 levels. Gross bookings were up 58% YoY to hit $10.7bn, while delivery bookings jumped 12% despite an Omicron-induced slowdown at the start of the year.
- Unlike Lyft, Uber has no driver problems (whew) – in fact, its driver count is at a post-pandemic peak. But, it's got other cash flow concerns thanks to a few bad investments, reporting a loss of $5.9bn due to the declining value of its stake in Didi Global, Grab, and Aurora.
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Uber gets a parking spot in LondonUber’s lengthy battle with UK regulators has finally come to a stop in a pretty spot.
🔍 Key points:
- Uber has won a 30-month license to operate its ride-hailing platform in London after finally convincing regulators that the app is “fit and proper”.
- London’s transportation regulator has revoked Uber’s license twice in the past few years – in 2017 and 2019 – but the brand has turned on the charm by adding new safety features and recognizing the labor union for private drivers.
- Regulatory scrutiny is prolly why Uber is integrating with OG taxis. The platform has recently decided to list NYC yellow cabs on its app after years of contention between the two, which will also address the growing driver shortage that both are facing.
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Uber rakes in the ridersUber is reaping the rewards of a faster-than-expected Omicron recovery, though the threat of oil prices looms.
🔍 Key points:
- Uber hiked its first quarter outlook on Monday as the ride-hailing platform enjoys “healthy and growing demand” for both its rides and delivery businesses in a post-Omicron world.
- Trips are back up to 90% of their pre-pandemic numbers and gross bookings ended February up over 50% m-o-m. Uber is now expecting to bring in adjusted earnings of up to $150m at the high end in Q1, up from the $130m it forecast in its last earnings report, and way above the $120m analysts estimates.
- But, there are still external figures to consider, specifically for ride-hailing drivers. The war in Ukraine has pushed gas prices up to crazy highs, increasing over $0.49 in the last week for the largest seven-day increase ever. As Uber drivers are starting to have to spend around 60% of their income on gas, there is likely to be some pushback.
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Uber earnings go the extra mileUber investors get served a tasty Q4 earnings that got a boost from a booming delivery business.
- Prices rallied 6% in Thursday morning trading after it topped on both ends with EPS of $0.44 on revenues that were up 83% to $5.8bn.
- Its delivery business turned profitable for the first time, seeing growth of 34% y-o-y to hit delivery bookings of $13.4bn. Though it was outperformed, its mobility business certainly held up its end, reporting $2.28bn in revenue and ride bookings that were up 67% y-o-y.
- However, headwinds from Omicron are going to take a toll, and Uber’s current quarter revenue guidance came in less than expected as people stay home. It’s not alone, and other industry leaders like Lyft (LYFT) have had their plans for recovery thwarted by Omicron.
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Toot tootUber sends prices jumping 4.28% by tooting its own horn.
- It had its “best week ever” last week in terms of gross bookings, according to CEO Dara Khosrowshahi, who says business is getting back to pre-pandemic levels.
- Investors shrugged off growing Omicron and inflation concerns. The jump came amid a broader market sell-off that could have hurt the ride-sharing app as potential lockdowns loom.
- It’s also looking to sell its 12% Didi Global stake after the Chinese ride-sharing app decided to delist its U.S. shares in the face of mounting regulatory pressure. As of Q3, Uber’s stake has cost it over $3bn.
Uber gets a jump startUber picks up speed on the back of bullish coverage from UBS.
- Uber soared 6% to close at $28.12 on Thursday after hitting its lowest price in over a year on Wednesday in the face of an Omicron-induced sell-off.
- UBS thinks the stock could double from current levels. It initiated coverage with a “buy” rating and an $80 price target, naming Uber as a top pick.
- It’s not all good news. Didi Global (DIDI), in which Uber has a 12% stake that has cost it over $3bn already, is delisting its U.S. shares.
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Uber’s joint ventureUber gives “going green” a whole new meaning with its first foray into the weed delivery business.
- Uber Eats will now let people order cannabis on their app in Ontario, Canada, in partnership with retailer Tokyo Smoke, which operates more than 50 dispensaries in Ontario.
- CEO Dara Khosrowshahi hinted at the move in April and is eyeing the U.S. as its next market – if it can get over the regulatory speed bumps.
- Canada’s cannabis market is expected to hit $6.7bn in value by 2026 after demand lit up during lockdown, and the U.S. market has the potential to reach $30bn by 2025.
Uber takes a hit from a bad investmentUber investors are hoping for an airbag after Q3 earnings come crashing in, feeling heavy pressure from its Didi Global investment.
💸 Uber reported its first adjusted profit ever and a revenue jump of 72% to $4.8 billion.
⛽️ The rebound was fuelled by the return of ride-hailing and strength in food delivery amid a return to normal life.
🚕 Driver’s are off hiatus and are finally agreeing to get back behind the wheel after being given 250 million reasons why.
🇨🇳 Things came screeching to a halt when investors saw the dent caused by Uber’s stake in Chinese rival Didi Global.
🚨 Didi has lost 40% of its value after a Chinese crackdown sank the stock, driving Uber’s $2.4 billion quarterly loss.
📉 Guidance left investors wanting more, with EBITDA forecasts of up to $75 million on expectations of $98 million.
Sparks fly between Uber and HertzUber and Hertz have reached an exclusive agreement for Uber drivers to be supplied with the mass of Tesla’s that Hertz has just acquired. The 50,000 Tesla’s will be offered as a rental option to Uber drivers by 2023, with the rollout starting as soon as November 1. Back in September, Uber pledged to make all of its vehicles electric by 2040, and this commitment will go towards achieving that. Dara Khosrowshahi, chief executive officer of San Francisco-based Uber, said:
Now is the time to drive a green recovery from the pandemic.
Uber ended the day down 2.80% nonetheless.
Uber races ahead on the fuel of its raised outlookUber gets a boost of over 11% to close at its highest price since July after the ride-hailing platform said that its third quarter bookings and adjusted earnings would be better than it originally thought. The company is now well on track to record its first profitable quarter – its total losses since it was founded in 2009 have come to over $22.1 billion so far, so investors are keen to see a profit. Uber now expects gross bookings of $22.8 billion and $23.2 million, and said that adjusted earnings will come in somewhere between a loss of $25 million and a profit of $25 million.
Prices ended the day at $44.36, up 11.5%.
Uber earnings buoyed by deliveriesShares of ride-sharing giant Uber popped over 6% in two days last week after reporting its second quarter earnings late on Wednesday, which beat estimates with a surprise profit but showed losses of over $500 million to its core business.
Shares of Uber spent the week in the red before seeing a turnaround on Thursday following its Q2 earnings report, which prompted a dip in price on Thursday morning before a jump of over 6% to see the week off. The platform reported earnings per share of $0.58 on revenue of $3.75 billion, easily beating expectations of $0.51 in losses per share and $3.93 billion in revenue. This quarter marks the first[ in over 13 quarters that Uber has reported a profit, and revenue was up over 105% from the same period the year before (which was mid-pandemic, to be fair).
The growing ride-sharing company brought in a net income of $1.1 billion in the quarter, largely thanks to large unrealized gains in Didi and Aurora – worth noting though that Didi’s share price has dropped nearly 40% in the last month, and Uber is bound to be affected. Though Uber is not at all immune to the effects of COVID, it has managed to lean on its Uber Eats segment to bolster the business, with its delivery business remaining strong despite the lifting of restrictions worldwide. All the Sunday night takeaways in the world aren’t enough to fight off the pandemic completely though, and its core business suffered a loss of $509 million in Q2. However, the company reaffirmed that it plans to reach EBITDA profitability by the end of the year
We successfully made large investments in Q2 to improve marketplace balance, and we are now well positioned to reach Adjusted EBITDA profitability by Q4. As we make progress towards that important milestone, we expect our Adjusted EBITDA loss in Q3 to improve to less than $100 million in addition to record Gross Bookings between $22 and $24 billion,
said CFO Nelson Chai.
Uber acquisition beefs up freight statusThe pandemic has taken its toll on Uber’s traditional business segments, so its latest $2.25 billion acquisition of trucking logistics company Transplace is aimed at beefing up its Uber Freight division.
Uber is best known for its ride-hailing services and food delivery segment, but it’s been giving some TLC to its Freight business in an effort to concentrate on those areas of the business that are seeing growth in the post-pandemic world. Uber Freight, the trucking division of Uber, will acquire shipping software company Transplace for a cool $2.25 billion from private equity firm TPG Capital, a move which is geared towards speeding up Uber Freight’s path to profitability. Uber Freight is essentially a middle-man between long-haul trucking and shippers, and Transplace will bring its relationships with shipping brokers and carriers to cover supply chain and logistics management.
Uber’s ride-sharing business has taken a hit during the pandemic, and though Uber Eats is many people’s go to for a night in, competition is sneaking in slowly but surely and making the food delivery market a tough one to dominate. As a way to bulk up its operations, Uber has started expanding its delivery options in the trucking business, hoping to bring in a more efficient digital bookings system to the domestic shipping sector. Though competition in the trucking space is nearly as competitive, this deal will make Uber Freight the eighth-largest third-party logistics company in the country.
This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem. This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers' entire supply chains, delivering operational resilience and reducing costs at a time when it matters most.
said Lior Ron, head of Uber Freight.
Uber driver stimulusUber announces a $250 million stimulus plan to try and entice new drivers, and prices sink 2%.
Uber’s one-time stimulus is aimed at not only getting drivers back on the road, but recruiting new drivers to the company – pretty crucial, given the bad press the firm has gotten in recent years about its treatment of employees, not to mention the numerous court cases it’s been fighting on how to classify (and pay) its drivers. Right now, the number of drivers is currently down around 40% from the same period in 2020 – although that’s obviously got a lot to do with Covid as well, which decimated the taxi industry. When the CARES Act was extended towards the end of 2020 and gig workers won unemployment assistance, a lot of drivers decided to hang up their keys.
Uber lost over $968 million in the first few months of 2021, with adjusted net revenues down 16%, and only 5 billion trips in 2020 compared to 7 billion the year before. Uber isn't the only company struggling, and competitor Lyft is facing a driver shortage too. The ride-sharing app lost $458.2 million in the last quarter over this past quarter, with adjusted net revenues down an astonishing 44%; although it has predicted that investments to boost driver supply can be expected to create Q1 revenue of up to $20 million.
The thing is, that with over 25% of the U.S. now vaccinated, Uber is finding that there are more trip requests than drivers around to give them. States are also beginning to ease pandemic restrictions and roll out vaccines, so it’s starting to look like a good time to be an Uber driver.