UBER appeared to defy inflationary woes yesterday as the ride-hailing app posted a positive quarterly cash flow for the first time.

The US firm smashed analyst expectations of $263.2m for generated free cash flow, posting $382m for the second quarter.

Shares were up over 17 per cent by midday yesterday.

"Last quarter I challenged our team to meet our profitability commitments even faster than planned — and they delivered," said Uber CEO Dara Khosrowshahi in a statement.

The number of drivers and delivery persons also climbed 31 per cent to an all-time high, hitting nearly five million. This was matched by 122m people using the platform monthly, exceeding the 120.5m analysts had pencilled in.

Commenting on driver shortages seen across the capital, an Uber spokesperson told City A.M. that new worker protections for drivers, as well as higher earnings, had led to more than 10,000 new drivers signing up with Uber in recent months. They said the company would continue to grow the driver base in London.

Research director at think tank The Entrepreneurs Network Sam Dumitriu said he was "unsurprised" by the tech firm's stellar results, praising the company's previous prioritisation of growth over profitability.

He told City A.M. this move was a "good bet" for Uber when interest rates were low, and the strategy was now coming good as we head into inflationary periods.

"The fundamental mobility business is pretty straightforward and sensible, so it makes sense it would get to that profitability."

The buoyancy of the model has been felt across the ride-hailing sector, with Lyft's shares also climbing over 10 per cent yesterday following the update.

Uber CFO Nelson Chai said we are in a "new phase for Uber".

(c) 2022 City A.M., source Newspaper