Uber settles VAT claim with HMRC and posts better than expected results

Uber is handing £615m to UK tax authorities to settle an investigation into unpaid VAT, as it reported better than expected results, sending its shares higher.

The San Francisco-based ride hire and food delivery company said it achieved a UK tax settlement on Monday to resolve all outstanding VAT claims and would pay £615m to HM Revenue and Customs during the fourth quarter.

Uber had previously argued it was exempt from paying VAT because its drivers were classified as self-employed. Following landmark court rulings that its drivers were workers with rights, it started adding 20% VAT in March.

The news came as Uber reported a 26% rise in gross bookings year on year, to $29bn (£25.4bn) in the quarter from July to September. Revenues beat forecasts with a 72% leap to $8.3bn after Covid lockdowns eased, leading to booming travel.

The Uber share price jumped nearly 16% to $30.80 when Wall Street opened, valuing the company at $61bn.

The mobility division grew faster than the food delivery arm. Trips during the quarter grew 19% year on year to 1.95bn, or about 21m trips a day on average.

Uber made a net loss of $1.2bn, mainly because of revaluations of its equity investments in other ride-hailing companies. But profits increased to $516m from $508m on an adjusted Ebitda basis (earnings before interest, tax, depreciation and amortisation).