Uber Posts Record Rider Demand in March -- 5th Update
By Dave Sebastian and Preetika Rana
Uber Technologies Inc. reported record monthly bookings for
March as Covid-19 vaccination rates accelerated across the U.S.
The company said Monday that it received more bookings in March
than in any single month since it was founded in 2009. Uber's
mobility business, which was decimated during the coronavirus
pandemic and includes its core ride-hailing operations, had its
best month since March 2020. Meanwhile, its food-delivery unit
posted record monthly bookings, with business more than doubling
Rival Lyft Inc. said last month that its weekly rides bookings
in March had rebounded to pre-pandemic levels.
But both companies face a daunting challenge: not enough drivers
to meet surging demand. The companies don't employ their drivers,
relying instead on gig workers to ferry their passengers. As demand
for Uber and Lyft rides plummeted during the pandemic, many gig
workers turned to work for grocers and food-delivery providers,
among other businesses that surged during the health crisis.
The latest round of stimulus checks has also adversely affected
driver supply, according to a person familiar with the matter.
Uber acknowledged that ridership was recovering faster than
driver availability. The company said earlier this month that it
was spending $250 million on bonuses in an effort to boost driver
availability in the near term. Lyft is offering bonuses for
referring former drivers back to the app.
Both companies have overhauled their businesses during the
health crisis, cutting staff and other expenses. Uber has shed some
of its costly businesses, including its self-driving unit. The
costs, combined with the uptick in Uber's food-delivery business,
helped cushion the pandemic's damage to the company's core
ride-hailing operations. Uber posted a narrower full-year loss in
2020 compared with the previous year.
The company said it expects to take a hit in the first quarter
from claims related to a settlement process for U.K. drivers. The
U.K.'s top court ruled in February that a group of former drivers
for Uber was entitled to a minimum wage and other benefits while
working for the company, dealing a setback to Uber and other
gig-economy companies in world-wide disputes over their employment
Uber and Lyft won a regulatory battle in their home state of
California late last year that exempted them from reclassifying
their drivers as employees, eligible for broad employment benefits.
They began offering some new benefits to drivers, however.
The companies have said they expect to become profitable by the
end of the year on an adjusted basis before interest, taxes,
depreciation and amortization.
Uber posted an adjusted Ebitda loss of $454 million in the
fourth quarter of 2020, compared with a year-earlier loss of $615
Uber's food-delivery unit has typically been a drag on its
bottom line, but the company trimmed its losses as orders soared
during the pandemic. Delivery also became a bigger part of Uber's
business last year. The ride-hailing giant acquired small
food-delivery rival Postmates Inc. and forayed into delivering
groceries, medicines and alcohol.
Following the news Monday, Uber shares closed up 2.91% to
$59.44. The stock has more than doubled over the past 12
Write to Dave Sebastian at firstname.lastname@example.org and Preetika
Rana at email@example.com
(END) Dow Jones Newswires
April 12, 2021 18:19 ET (22:19 GMT)
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