US Reporter

While the Tech Industry Suffers from Economic Crisis, Uber is not Showing Signs of Slowing Down

Photo Credit: Damian Dovarganes

Uber’s revenue increased despite rising inflation and gas supply disruptions. While much of the world is still recovering from the pandemic and dealing with the fallout from the Ukraine-Russia war, Uber is continuing to operate.

The company announced on Tuesday that its revenue had reached $8.1 million in the three months leading up to June. The figure is more than double what it was the previous year. According to Uber, this is primarily because people now prefer to use travel services rather than public transportation.

According to Uber’s quarterly earnings report, the number of passengers and drivers utilizing the transport platform has reached “all-time highs,” with almost 122 million people using the app each month. This is an increase of 21% over a year earlier.

Furthermore, the company announced that it had achieved a positive cash flow status. This means that the company’s revenue exceeds its expenditures on operations and other expenses, excluding capital expenditures such as property and physical assets. During the most recent quarter, the company received a total of $382 million in cash flow.

Uber made other investments, but they turned out to be unsuccessful. According to records, the company lost $2.6 million in investments to Grab and Didi, two other travel service providers. Didi, which mostly operates in China, has suffered enormous losses as a result of the Chinese government’s incredibly tight Covid lockdown protocols.

Read Also: Unionization Efforts Compel Starbucks to Raise Wages, Labor Leaders Demand for Extended Benefits

Lockdowns affected Uber operations

When the pandemic hit major cities, Uber became the preferred mode of transportation for many commuters. However, the closure of many businesses and the implementation of the in-house working scheme reduced consumer demand for travel service providers. On the other hand, online food delivery services have grown in popularity. This condition reduced demand for Uber’s Rides business while boosting its Eats business.

Uber continuously improved its delivery service in response to the growing demand for online meal delivery. In actuality, the business just last month announced the launch of its new grocery ordering services. Although Uber Eats already offers this function, the new and improved service allows users to track orders, plan deliveries in advance, and exchange products.

“[Uber] 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,” said Dara Khosrowshahi, the CEO of Uber.

“No one wishes for a tough economic environment or elevated inflation that’s affecting so many of us, including Uber drivers,” the CEO added during a conference. But, according to the business executive, Uber can now capitalize on its advantages thanks to its newfound niche and market efficiency.

Shares of Uber increased by 15% on Tuesday.

Read Also: Prices of Avocado, Coffee, Cooking Oil Dip Despite Inflation

What the tech industry experiences amid the economic crisis

In response to the economic downturn, a lot of computer organizations have frozen hiring processes and implemented cost-cutting measures, including layoffs.

Uber has also worked on fine-tuning its strategy to fit the present economic environment.

“When we look at the competitive environment, this is the strongest we felt competitively globally since Nelson and I probably started here,” Khosrowshahi stated – Nelson Chai is the company’s CFO.

“Right now, the machine is working,” said the CEO, referring to the company’s success in enforcing discipline on its drivers so that they can better deliver their service to their customers.

Uber recently announced new additions to its Upfront Fares feature, such as expanding to more cities and providing more information about the customer’s destinations to its drivers. According to Khosroshahi, this is the most requested feature by the company’s drivers.

Source: CNN

Opinions expressed by US Reporter contributors are their own.