Uber's Q2 Results Show Supply-Side Improvement Meeting Growth in Demand; Shares Attractive

We have three main takeaways from Uber’s second-quarter results. First, the supply side of the platform continues to improve, not because of higher incentives but mainly because of higher demand and an increase in driver or vehicle utilization across many markets in the United States. Second, we think the network effect is driving further adoption of Uber’s subscription offering, Uber One, which now has 10 million members and whose growth is likely to expand margins. Third, to our surprise, management is not seeing much impact from inflation—contrary to what most businesses have been experiencing—nor the threat of an economic recession.