Uber lost $707 mn in Zomato investment this year

NEW DELHI: Uber Technologies Inc reported positive quarterly cash flow for the first time ever on Tuesday and forecast third-quarter operating profit above estimates, as more people rely on its services for transport and ordering in food.

The company’s stock surged 15% to $28.2 and helped push shares of Lyft Inc by 11% and DoorDash by 4%.

Uber generated free cash flow of $382 million in the second quarter, topping analysts’ expectations of $263.2 million, as trips exceeded levels seen before the pandemic, boosted by office reopenings and a surge in travel demand.

The company also added more drivers and delivery agents to its fleet in the quarter, taking their total number to an all-time high of about 5 million and allaying concerns that soaring gas prices were deterring them from signing up.

“We have a very strong flow of new drivers who are signing up, coming on to earn,” CEO Dara Khosrowshahi said, adding that more than 70% of new drivers opted to join Uber to manage a hit from inflation and rising costs of living.

At its delivery business, which includes Uber Eats, growth slowed from the prior quarter but the company expects ordering in to become a habit for consumers. Revenue from Uber’s delivery segment rose 37% to $2.69 billion, while that of ride-share business surged 120% to $3.55 billion in the quarter ended June 30, both surpassing Wall Street expectations.

The ride-hailing major revealed it lost about $245 mn in its Zomato investment in the Q2 this year, along with a total of $707 mn loss in the first six months of 2022. Uber had sold Uber Eats in 2020 in an all-stock transaction to Zomato for a 9.99 pc stake in the online food delivery platform, and currently holds 7.78 per cent in the Deepinder Goyal-run company. As per reports, Uber is now likely to sell its 7.8 per cent stake in Zomato for around Rs 2,938 crore ($373 million).

The offer is expected to come with a price range of Rs 48-54 per share, equivalent to 612 million or 7.8 per cent of total outstanding shares.

As of June 30, Uber owned 612 million (61.12 crore) shares of Zomato.

The ride-hailing major revealed it lost about $245 mn in its Zomato investment in the Q2 this year, along with a total of $707 mn loss in the first six months of 2022