In early August, Uber Chief Executive Officer Dara Khosrowshahi declared that "the business is really hitting all cylinders." A report from Bloomberg elaborates the statement by saying that Uber has seen a revenue pump of 105% to $8.1 billion in the second quarter of 2022. Also, with the ride-hailing company's gross bookings reaching $291 billion, it is said that these numbers could keep them afloat in the event of an economic recession.
Check out this inflation update tab by CNBC for more information about the August inflation.
Uber Claims to be Inflation-Proof
It seems like Uber did not miss on this one, as CNBC reported last Sept. 13 that the company believes rising inflation could benefit them. According to Uber, the reported surging inflation from a key stocks report last week cannot impact them nor put the business to a standstill. The company's supply side is said to help Uber stand its ground.
In a recent CNBC interview, CEO Khosrowshahi shared his insight about the impending economic downturn and its effects on his company. The Uber exec said that while the cost of basic products and essentials continues to rise, more and more people choose to sign-up and drive for Uber.
In most cases, businesses consider inflation as a time when sales are expected to dip as prices rise and buyers have a weakened purchasing power. An economic downturn is characterized by a series of layoffs and job cuts as businesses find every way to cut costs and prevent bankruptcy.
Businesses like Uber are not like other companies that succumb to collapsing international markets. Uber instead capitalizes on the need of the times by offering a unique window into consumer trends.
More Drivers Are Considering Working for Uber
Furthermore, a CNN Business report explains that in order to better serve drivers, Uber has been able to "apply discipline" as it updates the platform. This includes a smoother transition between driving and delivering, as well as improved onboarding to make it simpler for personnel to sign up. These mechanisms perhaps are what pushed the company to become cash flow positive back in early August.
"If anything, 72% of drivers in the U.S. are saying that one of the considerations of their signing up to drive on Uber was actually inflation," the Uber CEO said.
As of writing, US inflation continues to pump prices to unwavering levels. According to a New York Times inflation report, the economic downturn is still not easing, contrary to what most analysts predicted to occur in Aug.
Despite the continuing inflation, gas prices have seen a steady price roll back in the last three months. This news is especially beneficial for ride-hailing companies like Uber.
More and more drivers are joining Uber to save them from the worsening recession. According to NBC, since the pandemic, Uber has hired more drivers and couriers who are now making a living. Over the previous year, new driver registrations increased by 76%.
