Uber Technologies said on Wednesday that it has no need to increase incentives to attract more drivers and forecast a strong second quarter, a day after its rival lyft indicated that it will need to spend more on labor in the coming months.
The ride-hailing giant advanced its results to Wednesday morning from late afternoon, after Lyft shares plunged 26% on Tuesday as its projected operating profit missed expectations on rising driver pay, dragging down to Uber stock in its wake.
Shares of Uber fell 9% in early trading as analysts said investors were steering away from losing companies whose consumer-facing businesses could come under more pressure as inflation accelerates.
Uber has a more diversified revenue base, thanks to Uber Eats, but the issues with Lyft could affect Uber as well, especially on the cost side,” said Russ Mould, chief investment officer at AJ Bell.
On Tuesday, Lyft said it would have to spend more to balance supply and demand in coming quarters, hurting its already meager operating profit. Its shares fell 30% in morning trading, wiping out more than $3.2 billion in market value since Tuesday’s close.
On Wednesday, Uber also reported a drop in monthly active riders in the first three months of the year from the previous quarter, a common trend in the industry during the coldest winter months, but was keen to differentiate itself from its peers. smaller competitor.
“I think you heard last night that one of our competitors in the United States is having challenges,” Uber CEO Dara Khosrowshahi told analysts during a post-earnings call, referring to Lyft.
Khosrowshahi said Uber’s driver base is at a post-pandemic high, adding that the company expects that trend to continue without significant investment in incentives.
Uber reported first-quarter adjusted EBITDA, which excludes stock-based compensation and other expenses, of $168 million. This figure exceeded the average analyst expectation of 132 million dollars, according to IBES data from Refinitiv. The company’s forecast for the second quarter also beat analysts’ expectations.
In net terms, however, Uber’s first-quarter loss rose to $5.9bn, up from $108m a year ago, driven by a $5.6bn drop in the value of holdings in other companies. underperforming, especially China’s Didi Global.