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Uber narrows loss on food-delivery uptick, cost cuts, but ride-hail demand flat By Reuters

© Reuters. FILE PHOTO: An Uber logo is seen during the global outbreak of the coronavirus disease (COVID-19), in Redondo Beach, Los Angeles, California, U.S., November 2, 2020. REUTERS/Lucy Nicholson

By Tina Bellon and Akanksha Rana

(Reuters) -Uber Technologies Inc on Wednesday said its food-delivery business continued to grow, but ride-hailing bookings were flat from the previous quarter though March delivered the first signs of U.S. recovery from the COVID-19 pandemic.

But the ride-hailing mobility business had to absorb a $600 million hit to account for a settlement with its more than 70,000 UK drivers and provide them with more benefits.

Shares ticked up 1% in after-hours trading.

Uber (NYSE:) posted an adjusted $359 million first-quarter loss before interest, taxes, depreciation and amortization – a metric that excludes one-time costs, including stock-based compensation, narrowing losses by nearly $100 million from the previous quarter.

Analysts on average had expected the company to report an adjusted EBITDA loss of around $452 million, Refinitiv data showed.

Uber has promised to be profitable on that metric by the end of the year, three months after its smaller ride-hail rival Lyft Inc (NASDAQ:), which on Tuesday said it would report sustained adjusted profits starting in the third quarter.

Uber ride-hail gross bookings, which plummeted over the last year due to the pandemic, remained roughly flat from the last quarter and down 38% from the previous year.

The $600 million UK charge is a sign of the costs the company could face if it were to provide similar benefits to U.S. drivers, a measure it is pushing for with U.S. regulators to avoid even costlier regulation that would turn gig workers into employees.

Uber on Wednesday said it had 3.5 million active drivers and food-delivery workers on its platform during the first quarter, the majority of whom work in the United States.

Uber’s first-quarter results come on the heels of the company’s announcement last month that March had been the best month in the company’s nearly 12-year history, with its mobility business reporting the most bookings since the start of the pandemic and delivery demand outstripping driver supply.

The recovery is mainly driven by Uber’s North American business, where higher COVID-19 vaccination rates and a loosening of government restrictions see many people return to pre-pandemic activities.

Excluding the $600 million charge, Uber reported $3.5 billion in first-quarter revenue, ahead of an average analyst estimate for $3.29 billion, according to Refinitiv data.

Revenue at Uber’s delivery segment, which includes its Uber Eats restaurant delivery business, more than tripled from last year and grew 28% from last quarter to $1.7 billion.

Some analysts have questioned whether the delivery boom would last once customers were no longer homebound and businesses and restaurants reopened.

But Uber in the past said it expected many of its Uber Eats customers to remain loyal and in an investor presentation on Wednesday showed delivery booking in Sydney and New York increased as those cities were reopening.

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