Uber Finally Makes a Profit, But Not Really

Matt Posky
by Matt Posky

On Thursday, Uber Technologies reported its first profitable quarter since the company launched in San Francisco way back in 2009. This represents a huge achievement for the company, which has been investing heavily to expand the business in the hopes that it will eventually become the world’s favored ride-hailing, courier, and food-delivery service.

But here’s the rub. Uber is technically only profitable on an adjusted basis that takes a pretty narrow view of its finances. Despite this, it’s still a step in the right direction and may foreshadow the reliable earnings the company has been seeking for ages.

Concerns persist, however. Uber has needed to assuage investor fears regarding driver shortages, saying that the business would increase spending to incentivize people to get back on the road. The company has already dropped $250 million toward the cause, padding out its ranks by 640,000 since the start of 2021. So it’s unclear how much more money it wants to put toward luring new drivers. But Reuters reported that this strategy wouldn’t even be deployed until after the business felt the pandemic was thoroughly in rearview, adding that it wasn’t the only issue Uber needed to address.

From Reuters:

But a massive drop in the value of its stake in Chinese ridehailing company Didi drove a $2.4 billion net loss in the third quarter, and Wall Street viewed Uber’s fourth-quarter forecast as disappointing. Shares bounced in after-hours trade and were up about 1 [percent] as Uber briefed Wall Street in a call.

The California-based company reported adjusted earnings before interest, taxes, depreciation and amortization, a measure that excludes one-time costs such as stock-based compensation, of $8 million for the quarter ended Sept. 30. That compared to a loss on the same basis of $625 million a year ago.

Uber forecast an adjusted profit of $25 million to $75 million for the last quarter of 2021. Analysts on average expected $114 million, according to Refinitiv data.

Despite the adjusted profit, Uber’s earnings report came as a disappointment after smaller U.S. rival Lyft Inc on Tuesday reported its second consecutive quarterly adjusted profit at $67.3 million and said it expected adjusted EBITDA of between $70 million and $75 million in the fourth quarter.

Neither Uber nor Lyft are profitable on a net basis and nobody is sure when that might happen, regardless of whether they’re working within the company or analyzing it from the outside.

That said, Uber is trading higher today than it was at the start of the month and this has been attributed to the strength of its food-delivery services. For the quarter, reported revenue of $4.8 billion, which is up 72 percent from a year ago and above the forecasted of $4.4 billion. Gross bookings were $23.1 billion, which is 57 percent more than a year ago, and right within with the company’s recent guidance of $22.8 billion to $23.2 billion.

[Image: MikeDotta/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Dal20402 Dal20402 on Nov 06, 2021

    They've finally had to raise prices to cover costs. No one is going to hand them blank checks anymore. And that's a good thing. When they were carrying everyone around for 2/3 of cost, they were creating massive externalities: congestion in city centers, damage to non-Uber car services, damage to transit systems through both lower ridership and worse congestion. It's fine if they want to compete, but they shouldn't be able to dump.

  • Lightspeed Lightspeed on Nov 08, 2021

    Companies this big don't worry about making a "profit" all the real action is in stocks/securities/crypto/debt etc. etc. all powered by AI.

  • Scott What people want is the Jetson Car sound.This has come up before.
  • Joerg I just bought a Corolla Cross Hybrid SE a few weeks ago, and I regret it. But not for any of the reasons stated so far. It drives well enough for me, gas mileage is great for a car like that, the interior is fine, nothing to complain about for normal daily use. I bought this relatively small SUV thinking it is basically just a smaller version of the RAV4 (the RAV4 felt too big for me, drives like a tank, so I never really considered it). I also considered the AWD Prius, but storage capacity is just too small (my dog would not fit in the small and low cargo space).But there are a few things that I consider critical for me, and that I thought would be a given for any SUV (and therefore did not do my due diligence before the purchase): It can’t use snow chains per the manual, nor any other snow traction devices. Even with AWD, snow chains are sometimes required where I go, or just needed to get out of a stuck situation.The roof rack capacity is only a miniscule 75 lbs, so I can’t really load my roof top box with stuff for bigger trips.Ironically, the European version allows snow chains and roof rack capacity is 165 lbs. Same for the US Prius version. What was Toyota thinking?Lastly, I don’t like that there is no spare tire, but I knew that before the purchase. But it is ridiculous that this space is just filled up with a block of foam. At least it should be made available for additional storage. In hindsight, I should have bought a RAV4. The basic LE Hybrid version would have been just about 1k more.
  • MaintenanceCosts Looks like the best combination of capability, interior comfort, and subtle appearance can be achieved by taking a Laramie (crew cab, short bed, 4x4 of course) and equipping it with the Sport Appearance, Towing Technology, and Level 2 packages as well as a few standalone options. That's my pick.Rebel is too CRUSH THAT CAN BRO and Limited and up are too cowboy Cadillac.
  • Xidex easier to buy a mustang that already sounds like that. love the coyote growl
  • Oberkanone Shaker motor on an EV. No thanks.
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