Slowly but steadily, Uber’s is recovering from the hit that it took during the corona virus pandemic. Even so, the gradual rise in profit raises more doubts about the company’s profit index. On the other hand, the once unprofitable delivery service is now growing at a pace that indicates that the pandemic has left more imprints on social habits than expected.
The second quarterly report of 2021, announced on Wednesday, is the best the San Francisco- based company has recorded since the global lockdown. The rare $1.4 billion profits originated from an increase in the values of Uber’s stakes in China’s foremost ride-hailing service, Didi, and a self-driving car sector that was recently handed off to Silicon Valley start-up, Aurora.
The returns of these have overshadowed the losses and setbacks the company has been experiencing from its unprofitable operations.
For this quarter, the revenue amounted to $3.93 billion, more than twice its not so encouraging profits from the same time last year when a majority of the population was unable to hail rides due to the pandemic-induced lockdown. Other highlights include a leap in rides totalling 1.51 billion rides provided and a double increase in revenue from last year amounting to $1.62 billion.
The CEO, Dara Khosrowshahi, reiterated an earlier promise by the company stakeholders on Wednesday. They had pledged to become profitable through an unconventional approach called “adjusted earnings before interest, taxes, depreciation and amortization” by the final three months of the year. However, they reverted during the second quarter with a loss of $509 million, a number lower than the loss incurred last year but higher than the first quarter of this year.
These losses stem from Uber’s attempts to regain ground after the effects of the pandemic and a tough competition with Lyft in the U.S. The company gave a lot of incentives to encourage drivers to re-join their ride-hailing service. The pressing need for drivers is expected to dwindle, thus reducing the adjusted loss for the current quarter ending in September to less than $100 million.
Despite these optimistic projections, investors remain doubtful. Encouraging as the numbers seemed, ride-hailing revenue was still at about 30% below its level as at two years ago, shares had fallen by more than 30% and stock dropped more than 4% in extended trading even after the announcement of the second-quarter report.
The CEO, Khosrowshahi, however, encourages that things are starting to shift. He told analysts during a conference call that the ride-hailing service was nearly back to full strength even though a scarcity of drivers in some major markets meant that fares would soon be higher than passengers were willing to pay. He expressed hope in the increase in the demand for rides and delivery couriers. Also, regardless of its expansion losses, the take-out food and groceries delivery service is bringing in even more money, steadily increasing the company’s revenue.