The big favor that inflation did for Uber
Rising prices in the global economy provided the perfect cover to raise prices in ride-hail
Hello and welcome to Oversharing, a newsletter about the sharing economy. If you’re returning from last time, thanks! If you’re new, nice to have you!
Once again it’s earnings season in the gig economy. Uber and Airbnb kicked things off Tuesday with their Q3 results; a bunch more companies report next week. A quick rundown of the schedule:
Nov. 1: Uber, Airbnb
Nov. 3: DoorDash
Nov. 7: Lyft, Rover
Nov. 9: Fiverr
Nov. 10: Wag!, WeWork
Nov. 14: Bird
Earnings season in the gig economy also means earnings season in Oversharing. First up: Uber.
For the third quarter, ended Sept. 30, Uber Technologies Inc. reported $29.1 billion in gross bookings (+26% from the same period last year), 124 million monthly active platform consumers (MAPCs, or the number of unique consumers who completed a transaction on Uber’s platform at least once in a given month, +14%), $8.3 billion in revenue (+72%), a net loss of $1.2 billion (half the $2.4 billion net loss from Q3 2021), and $516 million in adjusted ebitda.
The takeaway from all those numbers is that Uber had a good quarter. Revenue and adjusted ebitda beat estimates, and Uber forecast Q4 adjusted ebitda of $600 million to $630 million, also above expectations. Sure, Uber racked up another billion-ish of net loss, largely on revaluations of its equity investments, bringing total net income since it started publicly reporting those figures in 2017 to -$28.5 billion, an absolute value greater than the market cap of HP, Dell, or Barclays. But what to do with such losses at this point other than ¯\_(ツ)_/¯? The market certainly did. Uber’s share price jumped 12% on Tuesday to $29.75, its best showing since late September.
It might be surprising to see Uber, a service that could be considered discretionary spending, having a breakout quarter amid runaway inflation and serious economic anxiety about everything from the price of food to the price of gas. But as CEO Dara Khosrowshahi admitted after the second quarter: inflation has been good for business. Inflation is bringing more drivers to Uber’s platform as they look for ways to top up their earnings and putting the screws to Uber’s more capital-constrained competitors, while also so far failing to put a dent in Uber’s revenues or bookings.
But inflation has done Uber an even bigger favor. It’s provided the perfect cover for raising prices to a new and much higher normal.
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