California Win Helped Uber to Recover After A Dip For Wider Than Expected Loss

Uber Technologies, Inc. (UBER) reported a net loss in the third quarter of more than $1 billion on Thursday, slightly less than the $1.2 billion loss the company made in the same period in 2019. Loss per share was 62 cents, a little above the consensus of 60 cents by analysts.

In the third quarter, the world leader in ride-hailing passenger car bookings also saw its sales drop by 18 percent to $3.1 billion, largely because of the health crisis that encouraged practice of working from home, making use of the internet, email, and the telephone and reduced tourism.

But, thanks to the delivery business, which includes Uber Eats, revenue still slightly exceeded analysts’ expectations of $3.07 billion. In one year, gross mobility bookings in this sector jumped by 125 percent, a positive effect of the health crisis that helped spur demand for this type of service.

On Wall Street Uber shares lost as much as 3.7 percent in day trading, before bringing it to the gain of 2.34 percent, just after the news release that ride-hailing drivers attached with the firm in California will remain self-employed. Since the beginning of the year, however, the stock has increased by more than 40 percent, despite the coronavirus crisis.

Since Tuesday, Uber and its rival Lyft have benefited from their victory in a California referendum on the status of their drivers, which took place at the same time as the presidential election.

58% of voters were in favor of Proposition 22, which calls drivers and delivery drivers working as self-employed and not as employees of their platforms. This is a setback for the Western American state authorities, which has passed the AB5 law reclassifying these self-employed as staff of the firms they have been working with. The status would result in extra operating costs for the firms as well as higher fare rates for the people using the service.