Uber Technologies Inc. reported a 24 per cent increase in gross bookings in the first quarter, driven by continued growth in the delivery business.

The total value of customer spending on Uber reached US$19.54 billion, exceeding an average of analysts’ estimates compiled by Bloomberg. But the performance was blunted by a revenue decline, due largely to a US600 million expense from reclassifying workers in the U.K. The stock rose about 1 per cent in extended trading.

The San Francisco-based ride-hailing and delivery company narrowed its adjusted loss, Uber said in a statement Wednesday. It was US$359 million before interest, tax and other expenses, easily beating analysts’ estimates. The loss was 6 cents a share.

The company trimmed costs considerably in the coronavirus pandemic. It cut staff and sold businesses, including a pricey, years-long effort to develop self-driving car technology.

Now Uber is searching for new ways to get people into the back seats of its cars. It added a new feature to the app a week ago for booking vaccine appointments and transportation to a nearby Walgreens and back. Gross bookings from the mobility business were US$6.8 billion in the first quarter, more than analysts expected.

Making customers comfortable with riding in strangers’ cars is only one part of the equation. Many drivers switched to other jobs or stayed at home when the coronavirus wiped out ride-hailing demand. Now the company is trying to get drivers back. Uber said last month it would spend US$250 million on bonuses and other incentives. It said Wednesday that the program contributed to increased costs in the first quarter.

Lyft Inc., the main alternative to Uber in the U.S., reported financial results Tuesday. The company said ridership demand rebounded from the prior quarter and that its loss narrowed.

Almost as much as the pandemic wounded the rides business, it was a catalyst for Uber’s delivery operation. The company quickly expanded from meals to booze, groceries, packages and prescriptions. On Tuesday, Uber said it will add convenience store items for delivery from GoPuff, a fast-growing startup.

“We believe consumer behavior around delivery is likely to prove sticky as Uber Eats offers a better product today than pre-pandemic,” wrote Ron Josey, equity research analyst at JMP Securities, in a note to clients.

Delivery revenue rose another 28 per cent from the prior quarter to US$1.7 billion. That’s more than triple what it was a year ago.

However, Uber’s financial performance was impacted by a landmark ruling in the U.K. The company agreed to grant some government-mandated benefits to its drivers, resulting in the US$600 million expense, which weighed on revenue and added to its loss. Sales fell 11 per cent to US$2.9 billion. Excluding that cost, revenue grew 8 per cent.

The driver reclassification in the U.K. serves as a reminder of a severe risk facing Uber’s business. Making drivers eligible for employment benefits is expensive. The company won a reprieve from voters in California in the November election, but it faces many similar battles across the U.S. and around the world.

Meanwhile, Uber still needs to draw customers back to its services. One closely watched metric -- the number of people who use the platform each month -- fell 5 per cent to 98 million in the first quarter, falling short of Wall Street estimates of 100 million.

Uber ended the quarter with US$5.65 billion in cash and equivalents, more than expected. The company didn’t address in the statement whether it’s still on track to turn a quarterly adjusted profit by the end of this year.