[ad_1]
Uber reported financial results Tuesday that showed the company was trading steadily — and even turning a profit — as more passengers and drivers used the platform than ever before.
The company had revenue of $9.3 billion in its most recent quarter, lower than Wall Street investors expected but up 11 percent from a year earlier, and generated net income of $221 million. That was Uber’s second consecutive quarterly profit based on its own operations – rather than its investments in other companies – a milestone for a company that has long faced questions about its profitability.
Other tech companies have faced mass layoffs and nagging questions about their business during the recent economic downturn, but Uber has generally posted consistent, positive results over the past year. The worst days came early in the pandemic, when travel came to a near standstill and drivers left the platform.
The 6.5 million drivers who transported passengers and food around the world last quarter was a record, Uber said. The company said improvements it had made to the driver experience – such as showing a passenger’s destination and how much the driver would earn before accepting a ride – had sparked interest in working for Uber.
Passengers made 2.4 billion rides with Uber this quarter, a 25 percent increase from a year earlier. In October, Uber recorded a record number of monthly rides.
“These results demonstrate that Uber continues to drive profitable growth at scale – and why we believe we are well positioned for the journey ahead,” the company’s CEO Dara Khosrowshahi said in prepared remarks.
The biggest threat to Uber’s business is the labor disputes the company is facing across the country. Uber drivers are classified as independent contractors rather than employees, a distinction that saves the company money because drivers must pay their own expenses and generally do not receive health insurance or minimum wage. Uber says drivers appreciate the flexibility of being independent, rather than having to sign up for shifts.
In recent years, labor activists in states such as Massachusetts, California and New York have tried to undermine this business model, arguing that it exploits drivers. A challenge to a California law voters passed in 2020 that gives drivers limited benefits but bars them from being classified as employees will be heard by the state Supreme Court. If the court overturns the law, it will have significant consequences for Uber’s business.
Now that its core businesses are doing well, Uber is moving into other sectors and regions. Mr Khosrowshahi said the company is making “good progress” in expanding into countries such as Spain, Japan and Italy. It brought Uber One, its monthly subscription service, to 18 countries last quarter and partnered with Waymo, Google’s self-driving car unit, to allow passengers in Phoenix to request Uber rides from autonomous vehicles.
On a call with investors Tuesday, Mr. Khosrowshahi struck an optimistic tone about labor pressures.
“We can operate within any regulatory framework,” he said, but “most countries and states are moving toward flexibility plus benefits and protection.”
