Uber stock soared on Tuesday after it reported strong ridership and optimistic fourth-quarter forecasts.
CEO Dara Khosrowshahi stated that “as things are opening up, [bookings trends] are showing absolutely no signs of slowing down” during a conference call to discuss the results. The company allayed worries about increasing inflation and a potential recession impacting consumer spending by claiming that trips per rider continue to rise even among lower-income users.
Additionally, Uber reported that its driver base is back to pre-pandemic levels globally, indicating that the firm has overcome a driver shortage and will likely be able to satisfy demand. In comparison to a year earlier, drivers put in 16% more hours on average during the third quarter.
Uber anticipates adjusted profits before interest, taxes, depreciation, and amortization for the fourth quarter to be in the $600 million to $630 million range. FactSet’s analysts had predicted $567.7 million. In the third quarter, the company outperformed expectations and achieved a record adjusted Ebitda of $516 million.
Even still, Uber’s net loss for the third quarter was far more than predicted at 61 cents per share. Due to currency headwinds, gross bookings came in at $29.12 billion, somewhat less than the $29.55 billion that had been anticipated. In excess of the $8.1 billion analysts had predicted, revenue increased 72% to $8.3 billion.
On Tuesday, Uber stock (NYSE: UBER) increased 16% to $30.80. This year thus far, it is down 27%.
A Labor Department plan that might force Uber and other firms like Lyft LYFT +4.58% (LYFT) and DoorDash DASH +3.84% (DASH) to categorize their drivers or delivery workers as employees rather than contractors is a big topic for the company right now. When the idea was made public on October 11, Uber’s shares plunged 10% as a result of investors’ perceptions that the change would result in higher employee costs. According to the Atlanta Fed Wage Growth Tracker, wage growth was 6.3% in September compared to the same month last year, however, it is decreasing.
In the results call, Khosrowshahi stated that the business would continue to communicate with state governments and acknowledged that the path ahead would be challenging.
In an interview with CBS PARA +6.09% on Monday, Wedbush Securities analyst Dan Ives referred to the planned regulation as a “dark cloud above Uber.”
To comment on the idea, the Labor Department gave interested parties 45 days.
Featured Image – Megapixl © Mohammedsoliman4
Author Valerie Remorosa 
