Uber on Thursday reported that it lost $1.1 billion in the recently ended quarter as the pandemic walloped its ride-hailing business, while boosting its food delivery service.

Total revenue dipped 18 percent from a year earlier tand the third-quarter loss was marginally higher than in the same period last year.

Revenue in Uber's mobility unit was down 53 percent from the same quarter last year, while money taken in from Uber Eats, which includes delivering restaurant meals or other orders, more than doubled, according to the San Francisco-based company.

"Despite an uneven pandemic response and broader economic uncertainty, our global scope, diversification, and the team's tireless execution delivered steadily improving results," chief executive Dara Khosrowshahi said in an earnings release.

Uber shares that had been buoyed by the triumph of an initiative that lets drivers remain classified as independent contractors in California drifted slightly lower.

Demand for rides directly correlates to pandemic lock-down restrictions in cities, and Uber's mobility and deliver units are positioned to take advantage of returns to pre-virus lifestyles, Khosrowshahi said in a earnings call.

"Uber is becoming the go-to app for getting around or getting something delivered your door in 30 minutes," Khosrowshahi said.

The global pandemic has set back Uber's efforts to drive into profitability, but executives said they remain optimistic.

"As consolidated growth returns, it will return to a more profitable foundation," said chief financial officer Nelson Chai.

Drivers are staying away as well as riders, sharing fears of Covid 19, according to Uber.

"We have to make sure that drivers, understand that it's safe to drive," Khosrowshahi said.

"These are human beings and what's happening outside is very tough."

Uber is offering incentives to get drivers back on the road for the service. Meanwhile, riders using the service tend to be people who don't have the option to stay home because of their jobs, and they are very price sensitive, according to Khosrowshahi.

Uber reported more losses in the past quarter as the pandemic hobbled its ride-hailing operations, even though its delivery business improved
Uber reported more losses in the past quarter as the pandemic hobbled its ride-hailing operations, even though its delivery business improved AFP / Josh Edelson

Uber's outlook was brightened this week with the passage of a California referendum allowing it and other "gig economy" operators to keep their contractor-driver business model.

The measure known as Proposition 22 effectively overturns a state law which would require the ride-hailing firms and others to reclassify their drivers and provide employee benefits

"You'll see us more loudly advocate for new laws like prop 22," Khosrowshahi said.

"It's a priority for us to work with governments across the US and the world to make this a reality."

Labor organizers have vowed to fight for worker rights, which they say were eroded by an initiative letting ride-share and delivery services in the smartphone "gig economy" not provide security to those getting the jobs done.

"It's a way for an extremely unprofitable sector to buy themselves a new lease on life and hoodwink legislators," UCLA labor center researcher Brian Justie said of Prop 22.

"I dont think a lot of workers are happy about this."

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