The largest gig-work companies reported earnings last week, and investors were quick to look for any signs that economic pressure is tightening consumer spending.
But things weren’t so grim after all. Uber, Lyft, and DoorDash all reported strong revenues, showing that people will still order takeout and hail rides in an economy affected by decades-high inflation. Travel also continues to rebound as COVID-19 pandemic restrictions end, with Airbnb reporting strong overall results.
Companies have also implemented stringent cost-cutting measures, including slowing hiring or cutting what they deemed unnecessary spending.
Here’s a recap of what happened this past quarter:
Uber reported better-than-expected revenue for its second quarter, showing that it was continuing to find its footing and grow its business even in a tough macroeconomic environment. Uber CEO Dara Khosrowshahi told investors on a conference call Tuesday that surging inflation has shown little impact on its slate of services. The company saw record gross bookings and revenue in the quarter, and more people than analysts had expected used the platform monthly. Uber also saw a boost in driver sign-ups who were looking to make some extra money to offset the higher cost of living.
Airbnb has benefitted from a shift in consumer spend from goods to experiences, like travel. The home-sharing company said Tuesday it had the most amount of nights and experiences booked in a quarter ever. It’s also expecting that trend to continue, with its CFO saying on a call with investors that fourth-quarter reservations are already “very strong.” “Airbnb is well positioned for whatever lies ahead,” the company said in its shareholder letter.
Lyft’s cost-cutting measures and previous driver incentives are paying off, the company showed Thursday. Lyft reported its highest adjusted earnings in history and beat estimates on revenue. It also reported its best number of active riders in a quarter since the COVID-19 pandemic began. Investors cheered when Lyft said it was still on track for its rideshare volumes to reach and exceed pre-COVID-19 levels. Like Uber, Lyft is also seeing a rise in drivers signing up who are supplementing their income with gig work to offset rising inflation.
DoorDash recorded a record number of orders in its second quarter and did better-than-expected in revenue. The delivery company also raised guidance for its full-year marketplace gross order volume, which it said in its investor letter accounts for a “softer consumer spending environment.” DoorDash CEO Tony Xu and CFO Prabir Adarkar added in the letter that, despite broader shifts in consumer discretionary spending, DoorDash’s U.S. consumer engagement remains in line with previous years.
Just Eat Takeaway
Just Eat Takeaway wasn’t a widely watched company this quarter, since it delisted its shares from the Nasdaq stock exchange earlier this year. But the European company, which still trades on the Amsterdam exchange, has been under pressure since it bought the U.S.-based Grubhub service last year. Just Eat revealed Wednesday it wrote down the value of Grubhub by $3.1 billion amid a tough macroeconomic environment, slashing the subsidiary’s valuation nearly in half after it was acquired for about $7.3 billion. Just Eat said the write-down was due to the “reduction in sector valuation comparables” combined with decades-high interest rates and overall market volatility.