Uber swings to a profit as consumers’ gig-economy habits prove sticky

Five-star quarter… Uber shares surged 11% after the ride-hailing and delivery co rolled up with a $1B quarterly profit. Investors cheered the return to profitability (in the previous Q, investing losses and legal woes weighed down Uber’s otherwise lucrative biz). App transactions grew nearly 20% on the year last quarter, while revenue rose 16%, topping expectations. Uber expects transactions to rake in more than $40B this quarter, and forecast that its fledgling advertising business (picture: ads in the app) will top $1B.

• U-turn: Last year, Uber reported its first annual profit since going public in 2019. It has been tightening its seat belt, in part by trimming its staff and ditching self-driving plans.

Goodbye “Summer20” promo codes… Until recently, gig companies like Uber were spending big on marketing and discounts to win market share. But the era of the “millennial lifestyle subsidy” is over, and gig companies have started to raise prices and reduce freebies. In its pivot to profitability, Uber has hiked prices on rides and delivery (both businesses saw double-digit bookings growth last quarter). Ride-focused Lyft, which saw Q1 revenue jump nearly 30% on the year, reports today.

• Taco-flation: DoorDash, which has only reported a profit once, said last week that its Q2 revenue jumped as orders spiked 19% on the year. The food-delivery leader has raised its fees in some cities.

• Grocery-ease: Yesterday Instacart’s reported revenue blew past expectations as the biz doubled down on efforts to boost non-delivery revenue from advertising.