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Uber posts profit on one-time gains

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Uber said its ride-hailing business is growing as more people emerge from pandemic lockdowns and that its Uber Eats delivery business continues to expand./AFP
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Aug 05, 2021 - 07:43 AM

SAN FRANCISCO — Uber on Wednesday reported a profit in second quarter on one-time gains and said its pandemic-stalled ride-hailing business was showing signs of recovering.

The San Francisco-based company reported a profit of $1.1 billion. Revenue rose to $3.9 billion in the recently ended quarter, more than double what it took in during the same period last year.

The net income for the quarter included gains of $1.4 billion from the revaluation of its investment in Chinese ride-share firm Didi and another $272 million from its stake in the autonomous technology firm Aurora, according to Uber.

Uber made strong progress in luring drivers and couriers back to its smartphone-summoned ride and delivery businesses, chief executive Dara Khosrowshahi said during an earnings call.

“The majority of drivers who are coming back to the platform are what we call resurrected drivers; they’ve driven with us in the past,” Khosrowshahi said.

“As vaccination rates go up, we are seeing the resurrected drivers come back.”

But its delivery operations including Uber Eats generated the largest amount of revenue, with the unit continuing to benefit from trends that began during pandemic lockdowns last year.

“Our platform is getting stronger each quarter, with consumers who engage with both Mobility and Delivery now generating nearly half of our total company gross bookings,” Khosrowshahi said.

He saw the Eats restaurant delivery service as a hedge of sorts, likely seeing increased demand in the event of new Covid-19 lock-downs that crimp Uber’s ride-share business.

Revenue from Uber’s rides and delivery units essentially doubled, while money taken in by a freight division that connects truckers with shippers jumped 65 percent, according to Uber.

“Uber’s ride sharing business is on the clear path to recovery from the pandemic’s impact,” said eMarketer analyst Eric Haggstrom.

“We anticipate that Uber will experience hiccups before returning to their pre-pandemic ridesharing levels; the Delta variant is deterring many drivers from the ridesharing business.”

Tech analyst Rob Enderle of Enderle Group expected Uber’s earnings income to remain on a bumpy road due to the pandemic.

“With the variants cutting through the population, Uber’s income is going to be pretty uneven at least for the near future,” Enderle told AFP.

Meanwhile, the Eats delivery side of Uber’s business is showing “incredible” traction, according to Haggstrom.

Uber shares were down more than 3 percent in after-market trades that followed release of the earnings figures.

Uber in July announced a $2.25 billion deal to beef up its freight unit with the acquisition of Transplace, a firm specializing in logistics management software.

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