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Uber has yet to see a significant impact on consumer spending from the weakening U.S. economy, the San Francisco-based company said Tuesday, and demand for food deliveries remains “healthy.”
Uber chief executive Dara Khosrowshahi said the average number of rides booked by its 156 million monthly active users during the three months to June 30 had hit a record high.
Revenue rose 16 percent year-over-year to $10.7 billion, above analysts’ forecasts of $10.6 billion, driven by sales growth in its ride-hailing and food delivery businesses. Net income of $1 billion far exceeded market expectations of $659.5 million for its second quarter.
“He Uber “Consumption has never been stronger,” Khosrowshahi said. “We are not seeing any weakness or decline across any income group.”
Uber’s delivery segment had seen “healthy” order growth in the US during the quarter and “while there have been some concerns about consumer spending on restaurants and deliveries, we are not seeing any impact today,” he added.
His comments come a day after fears of a weakening US economy sent global markets into turmoil. In turmoiltechnology companies being the most affected.
In the event of a macroeconomic downturn, Khosrowshahi said, Uber’s ride-hailing business would likely remain strong, as during such periods the number of drivers on the platform typically increases, driving down prices and passenger wait times.
Uber shares, which have gained nearly a third in the past 12 months, opened up about 5 percent on Tuesday.
Net profit, which rose 158% year-on-year, was boosted by a $333 million revaluation of Uber’s stakes in other groups, including self-driving car company Aurora. Uber’s operating profit was $796 million, just below expectations of $799.8 million.
Looking ahead, Uber said it expected its adjusted earnings before interest, taxes, depreciation and amortization (its preferred profit measure) to be between $1.58 billion and $1.68 billion in the current period, with the midpoint ahead of analysts’ expectations of $1.62 billion.
Gig economy companies including Uber and U.S. rivals Lyft and DoorDash have come under pressure from investors to show they can make lasting profits while expanding their businesses, following an era of furious spending by groups and years of deep losses.
Last year marked Uber’s first launch full year operating profitabilitya milestone the company called an “inflection point.” Chief Financial Officer Prashanth Mahendra-Rajah said Tuesday that Uber’s “top priority” for capital expenditures was to invest in growth, including through potential acquisitions.
Resilient consumer demand in the latest quarter was helped by Uber’s efforts to make its delivery offerings more affordable, including through on-platform merchant promotions, lower average delivery fees and the expansion of its suite of lower-cost products such as ride-sharing, it said. Improved economies of scale also lowered Uber’s costs and boosted profitability.
A growing advertising business helped boost profitability, and the high-margin unit now has an annual “revenue run rate” of more than $1 billion, Uber said.
The total value of Uber’s ride, delivery and freight bookings rose 19 percent from a year ago to $40 billion, a slowdown from the 20 percent growth reported in the previous quarter and 22 percent in the period before that.
Excluding the impact of currency movements, that combined total for the current quarter would rise between 18 percent and 23 percent, in line with the long-term guidance Uber gave at its February investor day.
As part of its growth plan, the company has been entering new markets, including grocery delivery and deploying autonomous vehicles on its ride-sharing app through partnerships with companies like Waymo.
Uber was in “late-stage discussions” with other global self-driving car companies about having their fleets join its platform, he said.
Uber’s growing grocery and retail delivery business had “a clear path to EBITDA profitability,” the company said Tuesday. Initial results from its partnership with Instacart, which will allow the grocery delivery group’s U.S. users to order from restaurants listed on Uber Eats, were “encouraging,” the company said.