Uber Record Gains Amid Economic Downturn, says it is Maximizing Strength During Pandemic

Photo Credit: Damian Dovarganes

\Uber recorded increased revenue amid worsening inflation and disruptions in gas supply. While much of the world is still recovering from the pandemic and are dealing with the consequences of the Ukraine-Russia war, Uber is not slowing down its operations.

The company said on Tuesday that the company’s revenue reached $8.1 million within three months until June. The figure is twice the revenue it registered from a year before. According to Uber, this is mainly due to people now preferring to use travel services instead of public transportation.

In the company’s quarterly earnings report, Uber said that the volume of consumers and drivers that have utilized the travel platform are “at all-time highs.” Every month, Uber recorded around 122 million people using the application. This is a 21% increase from a year ago.

Further, the company reported that it has now become cash flow positive. This means that the money coming in to the company is bigger than the money it spent on its operations and other expenditures, not including capital expenditures which include property and physical assets. During the recent quarter, a total of $382 million worth of cash flow entered the company’s account.

However, other investments made by Uber proved to be unprofitable. Records show that the company lost about $2.6 million in its investments to other travel servicing companies like Didi and Grab. Didi, which primarily operates in China, is being subjected to extremely strict regulations by the Chinese government, leading to its tremendous losses.

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Uber thrived during the pandemic

When the pandemic hit major cities, Uber became the best choice of travel for many commuters. However, the closure of many businesses and the enforcement of the house working scheme caused the decline of consumer demand for travel servicing companies. In contrast, online food delivery services have risen in popularity. This condition reduced demand for the Rides business of Uber and catapulted its Eats business.

Due to the rising popularity of online food delivery, Uber constantly updated its delivery service. As a matter of fact, the company has announced its new grocery ordering services last month. While this is also a feature available in Uber Eats, the new and enhanced service allow users to do advanced schedule of deliveries, order tracking, and product replacement.

CEO of Uber Dara Khosrowshahi said that the company “delivered balanced growth on a platform that’s larger than ever, with the number of consumers and earners using Uber now both at all-time highs.”

“No one wishes for a tough economic environment or elevated inflation that’s affecting so many of us, including Uber drivers,” Khosrowshahi added during a conference. The recent gain by Uber, said the company executive, enables Uber to maximize on its strengths.

Uber’s shares went up by 15% this Tuesday.

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Tech industry feels effects of economic downturn

Many companies within the tech industry have undertaken steps to cut their costs amid economic turmoil such as layoffs and freezing hiring process.

Uber has also tried calibrate its approach to adjust to the current economic landscape.

“When we look at the competitive environment, this is the strongest we felt competitively globally since Nelson and I probably started here,” said Khosrowshahi. Nelson Chai is the CFO of Uber.

“Right now, the machine is working,” stated the CEO, referring to the success of the company in enforcing discipline to its drivers so they can better cater to customers.

Uber recently announced that it has new additions to its Upfront Fares feature such as expanding to more cities so its drivers will have more information about the customer’s destinations. Khosroshahi said that this is a feature most requested by its drivers.

Source: CNN

Opinions expressed by US Business News contributors are their own.

Ivan Ryan

Posted by Ivan Ryan

Ivan is a digital marketer with an interest in business. He loves reading self-help books and memoirs of successful people in business.

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