(Bloomberg) -- Uber Technologies Inc. reported a 24% 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 $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 $600 million expense from reclassifying workers in the U.K. The stock fell less than 1% in extended trading.The ride-hailing and delivery company narrowed its adjusted loss, Uber said in a statement Wednesday. It was $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 $6.8 billion in the first quarter, more than analysts expected.“We’re finally seeing light at the end of the tunnel,” Chief Executive Officer Dara Khosrowshahi said in a conference call with analysts Wednesday. Executives hosted the call from the company’s headquarters in San Francisco, a first since the pandemic began.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 $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% from the prior quarter to $1.7 billion. That’s more than triple what it was a year ago.However, Uber’s financial results were impacted by a landmark ruling in the U.K. The company agreed to grant some government-mandated benefits to its drivers, resulting in the $600 million expense, which weighed on revenue and added to its loss. Sales fell 11% to $2.9 billion. Excluding that cost, revenue grew 8%.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% to 98 million in the first quarter, falling short of Wall Street estimates of 100 million.Uber ended the quarter with $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.(Updates with CEO comment in the sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.