NEW YORK: It has been a tough earnings season for the technology industry, and markets more broadly.

Big Tech companies failed to convince Wall Street that their massive investments in artificial intelligence (AI) are paying off. Growth in their core businesses underwhelmed.

Their results, combined with broader concerns about the health of the US economy, triggered a meltdown that, at one point, had erased some US$6.4 trillion from global stock markets.

Amid all the gloom has emerged one bright spot: the gig economy.

In the past two weeks, Uber Technologies Inc, DoorDash Inc, Instacart and Grubhub parent Just Eat Takeaway.com NV have all topped expectations, notching double-digit growth figures across many of their most important metrics.

Their results not only worked to reinforce that demand for both rides and deliveries remain resilient, but they’ve also served as a broader counterpoint to fears that US consumer spending is softening across the board.

Gig-economy companies may benefit from trends that other firms consider headwinds.

Uber chief executive officer Dara Khosrowshahi said the company has experienced efficiencies during recessions. When the labour market is slow, more people may seek positions as drivers and couriers, which can reduce fares for consumers.

“While our consumers tend to be higher-income, we’re not seeing any softness or trading down across any income cohort,” Khosrowshahi said on an earnings call with analysts. “We’re confident that Uber can perform well because of the counter-cyclical nature of our platform.”

In contrast to major AI players like Apple Inc, Alphabet Inc and Microsoft Corp that have seen a market backlash, gig-economy companies were less likely to have been overhyped in the first place, said Harvard Business School professor Malcolm Baker.

“Uber has not had the same sort of momentum that some of the bigger tech companies have had, and so perhaps it is less prone to the forces of reversal that we are seeing right now,” Baker said.

These companies also aren’t facing comparable pressure to invest in AI, allowing them to either take risks elsewhere or cut costs.

AI momentum has been more about producers of AI models and infrastructure than about AI users like Uber, Baker said, adding that the ride-share firm’s existing tech is already up to the task of handling the needs of ride-hailing apps.

On the delivery side - Uber operates both a ride-share business and its Uber Eats platform - Khosrowshahi said consumer behaviour is “much more habitual” than many previously thought.

DoorDash chief executive officer Tony Xu said the same on his company’s earnings call.

“We’re seeing really strong demand on the consumer side,” Xu said. “We’re not actually seeing some of the challenges that you may be hearing about or reading about in other headlines.”

DoorDash, which holds a commanding lead in the US market over rivals Uber Eats and Grubhub, has staved off any skittishness around consumer spending to deliver better-than-expected results, analysts said.

The companies’ results suggest that ride-sharing and food delivery are both entrenched habits that consumers have already baked into their budgets.

And demand for food-delivery in particular has remained resilient even since the Covid-19 pandemic, when people were largely forced to cook for themselves or order take-out.

If anything, this earnings season suggests that consumers consider travel a discretionary expense, with companies such as Airbnb Inc and Booking Holdings Inc signalling soft demand, particularly in the United States.

Airbnb shares suffered their biggest intraday loss after the company delivered a weak forecast for a third straight quarter.

 - Bloomberg