People emerging from quarantine have places to be.
Much like any other profession that requires close proximity to customers, ride-hailing services like Uber were hit hard by the COVID-19 pandemic. People were far less willing to share an enclosed vehicle with a stranger, and that was in the rare instance that they were willing to leave their houses in the midst of the pandemic to begin with. However, with the three vaccines gradually proliferating throughout the United States, consumer confidence is gradually being restored in these close-proximity services.
Thanks to the ongoing vaccination efforts, Uber posted record gross bookings for car rides in the month of March, hitting an annualized run rate of $52 billion, a 9% improvement over February. Over the past year, Uber has lost approximately $6.8 billion on the stalling of its ride-hailing services, with that loss only being mitigated by the upswing in demand for food delivery services like Uber Eats. With this new record, though, Uber has once again affirmed its intentions of becoming a profitable company by the end of 2021.
“As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability,” Uber said in a filing with the Securities and Exchange Commission.
Uber says it saw its highest ever gross bookings in March https://t.co/Ef6Z1vMaxX
— MarketWatch (@MarketWatch) April 12, 2021
While this is good news for Uber, it comes on the heels of a myriad of controversies surrounding their treatment of their contracted drivers that sprang up while business while slowed. Uber recently announced their own “stimulus payment” to their driver force of $250 million to aid them in the process of getting back on the road. That money will go toward guaranteed pay, bonuses, and new driver on-boarding. Also, Uber ordered last month to reclassify all of its 70,000 UK-based drivers as employees, which means they are now entitled to a minimum wage from Uber. These two large expenses together may make Uber’s goal of profitability in the near future a little more complicated.