The largest gig-work companies reported gains last week, and investors were quick to look for signs that economic pressures are tightening consumer spending.
But it wasn’t that grim. Uber, Lyft and DoorDash all reported strong earnings, showing that people will still order takeout and hail rides in an economy hit by decades of high inflation. Travel also continues to recover as the COVID-19 pandemic restrictions end, with Airbnb reporting strong overall results.
Companies have also taken strict cost-cutting measures, including slowing down hiring or cutting unnecessary expenses.
Here’s a summary of what happened in the past quarter:
Uber reported better-than-expected revenue for the second quarter, demonstrating that it continued to ground itself and grow its business, even in a challenging macroeconomic environment. Uber CEO Dara Khosrowshahi told investors in a conference call on Tuesday that rising inflation has had little impact on service offerings. The company saw record gross bookings and revenue in the quarter, with more people using the platform each month than analysts expected. Uber also saw an increase in the number of sign-ups from drivers looking to earn some extra cash to offset the increased cost of living.
Airbnb has benefited from a shift in consumer spending from goods to experiences, such as travel. The home sharing company said Tuesday it had booked the most nights and experiences ever in a quarter. It also expects that trend to continue, with the CFO saying in a conversation with investors that fourth-quarter reservations are already “very strong.” “Airbnb is well positioned for what lies ahead,” the company said in its statement shareholder letter.
Lyft’s cost-cutting measures and previous incentives for drivers are paying off, the company showed on Thursday. Lyft reported the highest adjusted profit in history, beating revenue estimates. It also reported the best number of active riders in a quarter since the start of the COVID-19 pandemic. 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 an increase in the number of drivers signing up and supplementing their income with DIY jobs to offset rising inflation.
DoorDash recorded a record number of orders in the second quarter and outperformed in sales. The delivery company also raised the market’s gross order volume guidelines for the full year, saying in its: letter from the investor is good for a “softer environment for consumer spending”. DoorDash CEO Tony Xu and CFO Prabir Adarkar added in the letter that, despite wider shifts in consumer spending, DoorDash’s consumer engagement in the US remains in line with previous years.
Just eat takeaway
Just Eat Takeaway was not a much-watched company this quarter, as it delisted its shares from the Nasdaq exchange earlier this year. But the European company, which still trades on the Amsterdam stock exchange, has been under pressure since it bought US-based service Grubhub last year. Just Eat revealed it on Wednesday wrote down the value of Grubhub at $3.1 billion in a difficult macroeconomic environment, which nearly halved the subsidiary’s valuation after it was acquired for approximately $7.3 billion. Just Eat said the write-off was due to the “lowering in sector valuation equations” coupled with decades of high interest rates and general market volatility.