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Uber Shares Climb 5% as Company Secures Spot in S&P 500

Ride-hailing giant Uber recorded a 5% increase in its shares Monday (Dec. 4), following the news that it was chosen to join the S&P 500.

The announcement from S&P Dow Jones Indices sparked a flurry of purchases, CNBC reported Monday.

Although Uber will only join the S&P 500 Dec. 18, the anticipation of the move had a positive impact on the company’s stock, driven by investors buying more shares in expectation of the ensuing demand.

To qualify for inclusion in the S&P 500, companies must demonstrate positive earnings in the most recent quarter as well as over the previous four quarters in total, CNBC reported. Uber has met this requirement, reporting a net income of $221 million on $9.29 billion in revenue for its third quarter. Moreover, the company has generated over $1 billion in profit over the past four quarters. The S&P 500 also requires firms to have a minimum adjusted market cap of $14.5 billion, under Uber’s approximately $118 billion.

The announcement comes as Uber reported strong results in its most recent quarter.

The earnings results highlight the continued growth in the company’s membership numbers, increased spending by those members enrolled in Uber One, and the success of cross-selling across the platform itself.

“We’ve now got 15 million Uber One members,” CEO Dara Khosrowshahi said on a November conference call with analysts discussing the results, adding that “members spend four times more than nonmembers.” He also noted that retention is 15% higher for members than for non-members.

Khosrowshahi also pointed to the cross-selling opportunities within Uber’s platform, as consumers who use more than one mobility and delivery product tend to spend up to three times more than those who don’t.

Company materials said Uber expects its combined mobility and delivery gross bookings to see growth of 20% to 23% on a constant-currency basis in the fourth quarter. Trip growth rates should come in “at least 20%,” measured year on year.

Also in November, Uber added several features related to safety, navigation and earning to its app for drivers.

“Today we’re announcing improvements to the Uber Driver app, while also making earning on Uber safer and fairer,” Khosrowshahi said Nov. 13.