Uber’s earnings bouncing back as food delivery service finally shows a profit

Uber's food delivery service Uber Eats has turned profitable for the first time, the company said on Wednesday, in an earnings report that revealed it may be bouncing back after a rough run during lockdown.

Shares rose 6.8% in after-hours trading after the company's report showed $5.8bn in revenue for the fourth quarter of 2021, beating estimates of $5.36bn. It said demand for its ride-hailing service was again approaching pre-pandemic levels.

"In Q4, more consumers were active on our platform than ever before," said Dara Khosrowshahi, Uber's chief executive officer, in a statement.

Still, Uber forecast lower-than-expected adjusted profit in the first three months of 2022, as the Omicron coronavirus variant dampened travel demand in January. Lyft, Uber's main rival in the US, issued a similar warning on Tuesday.

In its own earnings, Lyft also reported an upward recovery trajectory tempered by the Omicron surge. It said per-rider revenue reached nearly $52 in the fourth quarter - a 13.5% increase from the third quarter and the highest amount in the company's nearly 10-year history.

While riders continued returning to Lyft compared with 2020 levels, ridership in the fourth quarter decreased by roughly 1% versus the prior quarter and ridership remains 30% below pre-Covid levels.

Uber forecast its first-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a measure that excludes one-time costs, primarily stock-based compensation, to come in between $100m and $130m.

The company said business had started picking up into February.

"Our results demonstrate just how far we've come since the beginning of the pandemic," Khosrowshahi said, adding that the company may also be bouncing back from the recent wave of Covid infections, with gross bookings up 25% month-on-month in the most recent week.

Uber's delivery unit, largely made up of its Uber Eats restaurant service, posted its first adjusted EBITDA profit of $25m, showing Uber's ability to scale the once loss-making operation against strong competition.

Delivery emerged as one of the company's main strengths during the pandemic. Steady delivery bookings signal that the rebound in rides has not come at the expense of food delivery, with consumers sticking to the service even as the economy reopens.

The California-based company reported adjusted EBITDA of $86m for the quarter that ended on 31 December. That compared with a loss on the same basis of $454m a year ago and was significantly ahead of analyst expectations for $62.03m in the fourth quarter.

Uber also posted net income of $892m, as it revalued its stakes in Southeast-Asian Grab and self-driving company Aurora Innovation, just a quarter after it reported a $2.42bn net loss driven by its stake in Chinese ride service Didi and stock-based compensation.

Reuters contributed to this report.