Uber sees few signs of customer pullback despite inflation

Nov 1, 2022, 5:33 AM | Updated: 3:10 pm
FILE - The logo for Uber appears above a trading post on the floor of the New York Stock Exchange, ...

FILE - The logo for Uber appears above a trading post on the floor of the New York Stock Exchange, Friday, Aug. 9, 2019. Shares of Uber are surging before the market open Tuesday, Nov. 1, 2022, after the ride-hailing company gave a fourth-quarter forecast indicating that consumers are growing increasingly more comfortable using the service now that pandemic fears have mostly eased. Uber Technologies Inc. announced that it foresees fourth-quarter gross bookings rising 23% to 27% year over year on a constant-currency basis, totaling $30 billion to $31 billion. (AP Photo/Richard Drew)

(AP Photo/Richard Drew)

Shares of Uber surged Tuesday after the company said there is little evidence that Americans are pulling back on hailing rides or ordering food deliveries despite soaring inflation.

“Cities are reopening, travel is building, and more broadly a continued shift of consumer spending from retail back to services,” said CEO Dara Khosrowshahi. “We’ve seen these trends continue into the fourth quarter with October tracking to be our best month ever for mobility and total company gross bookings.”

The company expects fourth-quarter gross bookings to rise 23% to 27% from last year, totaling $30 billion to $31 billion.

Shares of Uber Technologies Inc., down almost 30% this year, jumped 15% at the opening bell to $30.57.

In the most recent quarter, gross bookings increased 26% to $29.1 billion, or 32% on a constant-currency basis. Trips grew 19% to about 21 million trips a day, on average.

The San Francisco ride-hailing service struggled during the pandemic amid lockdowns, but has thrived with the rollout of vaccinations as Americans head back to the office, go out on the town, or stay home and order dinner from a restaurant.

Uber had struggled to find enough drivers to meet demand and last month, the Biden administration proposed new standards that would make it more difficult to classify millions of workers as independent contractors. That could effect companies like Uber and company shares on the day the proposal was released tumbled by double digits.

Khosrowshahi said Tuesday that any ruling along those lines “effectively returns us to the framework during Obama’s presidency which was a framework in which we grew significantly.”

He said there is an ongoing dialog with states about how workers are classified and providing protections for independent contractors.

“The road is going to be bumpy and for us the nature of work is always going to be a big issue that we have a responsibility to shape going forward in dialogue obviously with local governments,” Khosrowshahi said.

Industry analysts see tailwinds ahead for Uber as life returns to normal after the pandemic.

“Uber is continuing to see healthy growth as the driver shortage is essentially over while the company continues to benefit from travel returning, shifting to the office, and other post-pandemic trends continue to hold globally with Uber poised to benefit into 2023,” Wedbush’s Dan Ives wrote Tuesday.

Third-quarter revenue rose to $8.34 billion from $4.85 billion. This beat the expectations of analysts surveyed by Zacks Investment Research, who predicted $8.08 billion in revenue.

Uber lost $1.21 billion, or 61 cents per share, for the three months ended Sept. 30. That compares with a wider loss of $2.42 billion, or $1.28 per share, a year earlier. Wall Street was looking for a loss of 17 cents per share.

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Uber sees few signs of customer pullback despite inflation