Uber Inc. Experienced Balanced Effects of Coronavirus Pandemic
The Coronavirus pandemic rock-bottom has hit Uber riding business badly. On the contrary, its food-delivery business doubled its profits during the time. In the second quarter, the company has reported growth at a doubling rate for its food-delivery services, operated under the name of Uber Eats. Currently, homebound customers are ordering more food, whereas the need for taxi-hailing is reducing immensely.
Uber Inc. has recorded an adjusted loss of $837 million in overall earnings, excluding taxes, interests, etc. However, the company is aiming to stay profitable before the end of the year 2021 despite the larger challenges of the COVID-19 pandemic.
If we talk about Uber taxi facilities, before Coronavirus, they accounted for 2/3rd of Uber’s overall revenues, with an upward trend. However, this business had seen a downfall trend since March 2020 when the Coronavirus broke down. In India only, the company has laid off its 600 employees for the sake of cost-cutting. However, Uber’s business stays stable in other countries like the USA.
There is also a downfall for the active number of platform users, from 99 million to 55 million, i.e., over halved. The second-quarter revenue for Uber Inc. fell by 29%, accounting for $2.24 billion. As per Dara Khosrowshahi, Uber’s chief executive officer, the global spread of the company, in around 69 countries, has proved to be a great advantage to stay profitable in these tough times of Coronavirus pandemic.
Considering the food-delivery segment of Uber, the USA is contributing a lot. A huge percentage of Americans are staying home as Coronavirus hit the nation badly. They are all operating from their houses, adding to food orders placed online. This trend has boosted the revenues at Uber Eats, almost doubled.
Last month, Uber Inc. also announced its acquisition of Postmates Inc., for $265 billion, with the intention of business expansion in the field of everyday goods supply. This deal seems to be a proactive decision of the company where it is planning to acquire more customers in a business vertical different from taxi-hailing. The company’s CFO, Nelson Chai, said that in the coming few years, Uber’s food-delivery business would splurge in the majority of countries in which it operates.