Uber has continued to make losses during this pandemic period, reportedly losing up to $1.8 billion in the last three months, with adjusted net revenues down by 29 per cent compared to Quarter 2 of 2019. The company’s delivery business has been quite successful overseas but not enough to boost its returns.
Gross bookings on the ride-hailing division, which shows the amounts before paying drivers, fell by 73 per cent year over year. This was a slight improvement compared to the first quarter of 2020 with an 80 per cent decline.
It is no doubt that the Coronavirus pandemic has grossly affected the company’s earnings.
Meanwhile, gross bookings in the food delivery app, Uber Eats, grew by 113 per cent year over year, with increased demand for deliveries. Uber CEO, Dara Khosrowshahi announced during a call with investors.
“The Covid-19 crisis has moved delivery from a luxury to a utility,” he said.
The results were not as bad as Uber’s first quarter loss of $ 2.9 billion. However, it was a clear sign that Covid-19 had negatively affected the economy and was continuously depressing the company’s finances.
“Mobility recovery is clearly dependent on the public health situation in any given area,” Khosrowshahi said.
Uber has been attempting to expand its food delivery option after the pandemic dealt a blow on its core ride-hailing business. UberEats is yet to clinch a big portion of the Kenyan market owing to Jumia Food’s early arrival and expanded business reach.
Uber’s problems have been looming pre-pandemic with investors exerting pressure on the company to show profitability. Since going public, the company has continued to make losses, raising questions regarding the company’s sustainability.
Locally, Uber has attracted criticism from within with the occasional protests from drivers demanding for better prices. They have decried low trip prices resulting in lower revenue for the drivers rendering the business unsustainable in the long run.