By Noah Rothstein
Uber ridership strongly recovered in the second quarter of 2021 from the pandemic lows seen last year. Still, a continuing driver shortage and uncertainty about the delta variant have pushed the company’s shares down more than 5%.
Uber’s ride business has been profitable, yet its capital-intensive food delivery service has dragged down its bottom line. The company said it sees its losses narrowing to less than $100 million in the current quarter and that it remains on track to post a profit by the fourth quarter.
The easing of pandemic restrictions helped boost Uber’s rides business in the second quarter. However, increasing infection rates could hurt the company’s progress.
According to The Wall Street Journal, in the second quarter, the company’s bookings grew 114% year-over-year to $21.9 billion. Bookings for Uber Eats grew 85%, while the ride-hailing business more than doubled from last year’s lows.
Uber expects to surpass its bookings record in the current quarter. It said it expected third-quarter bookings between $22 billion and $24 billion, in line with analysts’ average estimate of $23 billion.
On Aug. 3, Lyft made its first quarterly profit. The company hit the milestone a quarter earlier than expected, in part because ridership rebounded while the company reined in costs.
Lyft said its third-quarter revenue would be hurt by the money it has put towards driver incentives, but it hopes that its investments will assuage the continuing shortage and drive down fares in the near term.
Uber said it did not plan to spend much more on incentives in the third quarter. It told analysts on Aug. 4 that new driver additions in the U.S. in July grew 30% from the previous month, even as it pulled back on some incentives. Lyft said 50% more drivers returned to the platform in the second quarter over the first quarter.
In May, as part of its path to profitability, Uber cut staff and shed non-core businesses. More recently, it expanded into delivering everything from groceries to flowers to drugs.
