People are getting out more after being in quarantine.
Like many other businesses that involve close contact with customers, ride-hailing services such as Uber suffered during the COVID-19 pandemic. People were hesitant to share a car with strangers, and many preferred to stay home during the health crisis. However, with the distribution of vaccines increasing across the US, people are gradually regaining confidence in these close-contact services.
Thanks to the vaccination efforts, Uber recorded its highest gross bookings for car rides in March, reaching an annual run rate of $52 billion, an improvement of 9% from February. Over the past year, Uber faced losses of around $6.8 billion due to the decline in ride-hailing services, which was partially offset by the rise in demand for food delivery through Uber Eats. Despite these challenges, Uber aims to become profitable by the end of 2021.
According to a filing with the Securities and Exchange Commission, Uber stated, “As vaccination rates rise in the US, we are seeing that the demand for rides is increasing faster than the availability of drivers, and the demand for delivery services continues to surpass the number of couriers.”
Uber says it saw its highest ever gross bookings in March https://t.co/Ef6Z1vMaxX
— MarketWatch (@MarketWatch) April 12, 2021
While Uber celebrates this milestone, it follows a series of controversies concerning their treatment of contracted drivers during the slowdown. Uber recently announced a $250 million “stimulus payment” to support their drivers in returning to work. This fund will cover guaranteed earnings, bonuses, and attracting new drivers. Additionally, Uber was mandated last month to reclassify its 70,000 UK-based drivers as employees, ensuring them a minimum wage. These financial obligations may pose challenges to Uber’s profitability goal in the short term.
