Shares in Uber Technologies Inc. dropped in after-hours trading today after the ride-hailing giant reported weaker-than-expected first-quarter revenue, despite a lower-than-expected loss.

For the quarter ended March 31, Uber reported a loss of $108 million, or six cents a share, on revenue of $2.9 billion on a loss of $108 million. Analysts were predicting a loss of 54 cents a share on revenue of $3.29 billion.

Gross bookings in the quarter came in at $19.54 billion versus an expected $18.07 billion and up from $17.2 billion in the previous quarter. Delivery continues to dominate for Uber as it grossed $12.5 billion in bookings, close to double the $6.8 billion in ride-hailing gross bookings. Gross bookings overall rose 24% year-over-year.

The revenue figure was skewed because of a $600 million accrual made for the resolution of claims in the U.K. relating to the classification of drivers. The line item in Uber’s accounts refers specifically to the court ruling in February in which the U.K. Supreme Court ruled that drivers who provide rides and deliver online orders who work for Uber are legally considered workers.

The lower-than-expected loss is the result of Uber selling its self-driving arm to Advanced Technologies Group. Although the news was first reported in December, the settlement of the deal included a gain of $1.6 billion in the first quarter, partially offset by the $600 million U.K accrual.

Rider stats across the board, as they are for rival Lyft Inc., which reported its quarterly earnings yesterday, are down from the same time last year because of the COVID-19 pandemic but are starting to climb back. Uber reported 1.447 billion trips in the quarter, down 13% year-over year, and monthly active platform consumers fell 5%, to 98 million.

Declining usership year-over-year would normally not be a positive, but coming close to pre-COVID rates is a positive and that’s exactly how Uber is pitching the data.

“Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings,” Chief Executive Dara Khosrowshahi said on an investor call. “We’re finally seeing the light at the end of the tunnel.”

Khosrowshahi also added that Uber is still on track to show a profit before amortization, interest, depreciation and taxes by the end of the year.

Uber once again declined to give guidance for the next quarter because of the ongoing pandemic.

Investors didn’t like the mixed bag of results. Uber’s share price was down 4.75% in after-hours trading.

Photo: Yuya Tamai/Flickr