San Francisco — Uber will buy back $20bn of its shares and forecast third-quarter bookings above Wall Street estimates on Wednesday as the ride-hailing and delivery services company benefits from growing use of its paid loyalty programme.
The company said members for its $9.99 “Uber One” programme jumped 60% in June to more than 36-million from a year earlier, and more than one-third of its bookings were coming from them.
These users are crucial for Uber as they engage with the two services, generating more than three times the profit compared to that from users who use just one service.
Uber held a weeklong event in May to draw more people to the programme, offering discounts and deals across rides, food delivery and groceries. The company said it added 500,000 users over the course of the week.
Uber’s stock has surged 48% this year, making it one of the top performers on the S&P 500 index. It was down about 1% in early trading.
Uber and rival Lyft, which reports results after markets close, are under investor pressure to prove they can maintain growth even as the North American ride-hailing market becomes saturated.
Uber expects current-quarter gross bookings, a measure of the total dollar value of transactions, to be between $48.25b and $49.75bn, while analysts estimate $47.3bn, according to data compiled by LSEG.
The forecast came after a better-than-expected 18.2% jump in gross bookings in the second quarter that was powered by a 24.6% rise at Uber’s delivery business and an 18.8% growth in its mobility unit.
Uber benefited in the June quarter from increased commuter demand during weekdays, with riders using its “Price Lock Pass” to take more than six additional monthly commute trips on average.
The subscription, which offers fixed pricing on selected routes for $2.99 a month, is part of Uber’s broader strategy to drive habitual usage, and is now available in more than 10 major cities across the US and Brazil.
Uber’s second-quarter net income rose to 63c a share from 47c a year earlier, in line with estimates, according to data compiled by LSEG.
The company forecast adjusted core profit of $2.19bn-$2.29bn for the current quarter, largely above analysts’ average estimate of $2.22bn.
Uber, which does not own technology for robotaxis, is betting on partnerships in the sector to boost growth in its mobility segment in the coming years.
The company now has more than 20 tie-ups in the hotly contested self-driving technology space, including its latest partnership for self-driving vehicles with electric-vehicle maker Lucid and start-up Nuro.
Uber’s latest buyback programme adds to the $7bn authorisation announced in early 2024.
Reuters
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