Earnings from Uber, Airbnb and Lyft point to upside potential for gig economy companies

  • There are few signs that consumers are spending less on ride-sharing and delivery services
  • Uber is making more money than ever from delivery, largely due to its higher-margin business contributions
  • Airbnb revenue showed travel demand remains robust after pandemic restrictions

Shares of gig economy companies are rebounding after a sharp decline in the first half of this year. Uber Technologies (NYSE:) jumped 36% last week, while LYFT (NASDAQ:) gained 46% for the same period, the best 7-day performance on record for both stocks.

Meanwhile, Airbnb (NASDAQ:) rose for a third straight week, representing a 20% gain over the past month.

ABNB Daily Chart

Despite the current macroeconomic headwinds, industry earnings showed there is little sign that consumers are spending less on ride-sharing, shared accommodation and delivery services. The latest evidence of this strength came from Q2 earnings reports from , and .

Uber CEO Dara Khosrowshahi told Bloomberg TV that his business is running full steam ahead with no signs that people are spending less. During the second quarter, the ride-sharing giant saw record bookings and gross revenue, which more than doubled to $8.1 billion.

Uber Daily Chart

Uber’s much smaller rival Lyft reported its best earnings ever, with revenue up 30% from a year earlier amid a widespread rebound in drive-in calls that showed the worst is may have gone for this stock which is still down more than 50% since the start of the year.

Lyft Daily Chart

Lyft Daily Chart

More advantages

I see more upside from Uber and Airbnb as both companies should benefit from resilient consumer demand to spend more on services and experiences after an extended period of COVID-related restrictions.

Additionally, both companies have taken advantage of the pandemic to invest in innovation and streamline their cost structures, making their business models more resilient to any potential economic downturn.

Airbnb’s global vacation home rental revenue platform also showed travel demand remains robust after pandemic restrictions, justifying its stock jump over the past month. The San Francisco-based company reported record second-quarter revenue and said the current period will produce another all-time high.

Uber’s delivery business, for example, has proven to be a great diversifier during the pandemic and has become a solid source of revenue in normal times. Uber Eats revenue is up 25% from a year ago. Uber’s delivery arm, including restaurants, groceries and alcohol, saw bookings rise 7% from a year ago to $13.9 billion. The company is making more money than ever from delivery, thanks in part to its higher-margin advertising contributions.

As rides return and UberEats’ business thrives, the company is also attracting drivers that were in short supply in the post-pandemic environment. An economic argument supporting this bullish hypothesis is that the labor market is still holding up due to labor shortages. This situation will likely persist, giving people strong purchasing power to travel.

On the other hand, Airbnb will continue to benefit from pent-up travel demand, even if we enter a mild or short recession. The InvestPro fair value model shows upside potential of 19.6% for the stock.

Fair value ABNB

Source: InvestingPro

IATA chief executive Willie Walsh told a gathering of airline CEOs in June that experience suggests the impact of an economic downturn won’t be so bad for the travel industry. . He pointed to the global financial collapse of 2008, after which passenger numbers remained stable in 2009 and showed strong growth in 2010.

Airbnb said in a letter to shareholders:

“During the height of the pandemic, we made many tough choices to reduce our expenses, making us a leaner and more focused company.

Since the beginning of the year, we have maintained this discipline, which has allowed our hiring and investment plans to remain unchanged since the beginning of the year. Airbnb is well positioned for all that lies ahead.”


Uber and Airbnb remain my two favorite gig economy stocks in the current bear market. Despite their recent gains, they still offer an attractive opportunity for long-term investors to take advantage of their global growth, which has even more room to manoeuvre.

Disclosure: The author does not own shares in the companies mentioned in this report.

Comments are closed.