Uber was greatly affected by the pandemic in 2020 and had struggled with high ride costs and long wait times.
Things are expected to take a turn as the ride-hailing company's CEO, Dara Khosrowshahi, said that the company is now recovering.
Uber's Changes
According to CNBC, the change will take effect at the end of the year because more drivers are returning to work. This means that the supply and demand issue will be solved.
During the Squawk Box interview, Khosrowshahi said that the company knew that they needed to bring on more drivers early on.
In the second quarter of 2021, they leaned into supply, especially in the United States, to revive their driver base and grow it across the country.
The outcome of the action they took during the second quarter of the year is now becoming visible.
The CEO stated that the pricing will be decreased by the end of the year, and the number of available Uber services will go up.
Uber spent millions in 2020 to entice drivers to sign up to its platform as the demand for the service became difficult to track.
Some drivers left the platform due to COVID-19, while some paused services before lockdown. Other drivers switch to food delivery and are now sticking with it.
The extended unemployment benefits given by the government were able to fill some of the needs of the drivers. However, since that has phased out, the drivers are gearing up to get back to work.
Despite the slow balancing of supply and demand, Khosrowshahi stated that Uber is still not where it is supposed to be. The company will provide updates on driver numbers in November.
The company adjusted its financial forecast and said that it would turn its first adjusted profit before the year's third quarter ends.
Uber anticipates its adjusted EBITDA or earnings before interests, taxes, depreciation, and amortization to be between a loss of $25 million and a profit of $25 million, according to The Baltimore Post.
The company stated that it believes its adjusted EBITDA for the third quarter of the year will be much better than a loss of $100 million.
The company added that the company should see a profit during the fourth quarter of the year on an adjusted EBITDA.
Uber also anticipates a gross booking of $23.2 billion for the second quarter of the year, adjusted from the $24 million that it predicted during the earnings call.
Uber's Struggle During the Pandemic
In 2020, the ride-hailing company offered cash incentives to its drivers to keep them going during the pandemic.
However, those efforts did little to entice the drivers to stay, thus leading to longer wait times and high prices in Uber service, according to TechCrunch.
Nicole Moore, a volunteer organizer with Rideshare Drivers United, stated that the drivers were on strike last year. They stayed off the road for numerous reasons. One of them is the fear of the pandemic, which made a lot of drivers quit.
The company stated that 80% of its drivers will come back once they are fully vaccinated. Uber has also campaigned to get its people vaccinated by offering free rides to vaccine centers in July.
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This article is owned by Tech Times
Written by Sophie Webster
