- Disruptive transportation innovator Uber Technologies finds itself locked in pitched combat with the global COVID-19 pandemic as well as adverse lawmakers, battling a severe shortage in ride-hailing bookings and efforts to change the company’s business model
- Uber has responded with ongoing efforts to acquire beneficial operations that help the ride-share business to diversify its operations, resulting in good news from its food and package delivery sectors since the pandemic broke out early this year
- While Uber’s ridership has dropped off 73 percent during the pandemic, Uber Eats deliveries are up 113 percent and revenues have exceeded analyst expectations
- The company and its chief competitor, Lyft, have vowed to appeal rulings declaring the companies must begin to regard its drivers as employees rather than flexible-operations contractors
Amid the economic devastation that the COVID-19 pandemic has inflicted on many quarters, ride-share pioneer Uber Technologies (NYSE: UBER) has shown its resourcefulness by mitigating the damage through M&A activity that includes its new UberX service for delivering packages to local destinations, which has seen 3 million trips recorded since launching in early June.
The company’s strategies have kept its fortunes afloat at a time when its core ride-hailing business has seen a 73 percent precipitous fall because of people’s reluctance to travel and commute during the persistence of the global contagion. Bookings for Uber’s food delivery business were up 113 percent as a significant number of people stopped eating out and started ordering in. And while the company’s losses per share exceeded expectations, revenues also exceeded expectations, according to reporting on analyst estimates by CNBC (http://nnw.fm/fmy9h).
The company was also able to narrow its net losses to $1.8 billion from the $5.24 billion figure it incurred in 2019 thanks to outflow for stock-based compensation, according to the news outlet.
Uber’s acquisitiveness continued this month as it announced it would purchase taxi software business Autocab, which it expects to help the company’s operations grow from 40 towns and cities in the United Kingdom to 170 (http://nnw.fm/U6TZh).
Uber’s resourcefulness faces new and greater challenges, however, as regulators target the company’s workforce structure, and both Uber and its chief competitor Lyft are finding their capacity for innovation challenged on policy-making fronts.
In California, the courts have ordered the two ride-share companies to begin classifying their contract drivers as employees, which would make the businesses liable for providing benefits such as overtime, sick leave and expense reimbursement following a push by lawmakers there to hold independent contractor-dependent businesses more accountable.
“Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities,” state Attorney General Xavier Becerra told CBS News (http://nnw.fm/FjDf0), referring to the pandemic-spawned hit that drained California’s unemployment insurance fund, which contractor-driven businesses don’t pay into.
The companies have vowed to appeal the ruling, arguing that the ruling threatens to “shut down an entire industry,” and they are also spending more than $100 million to support a measure on November’s ballot that would exempt them from the law.
“Ultimately, we believe this issue will be decided by California voters and that they will side with drivers,” Lyft spokeswoman Julie Wood told CBS.
Uber faces a similar battle in the United Kingdom, and is also appealing a decision by London regulators to drop the company’s business license in a dispute over safety (http://nnw.fm/13s02).
On Aug. 10, Uber published a document that defends its position by outlining a set of priorities it wants industry and governmental leaders to adopt in order to improve the quality of work for millions of independent workers, such as those employed by the company (http://nnw.fm/GEvGh).
“The current health and economic crisis has brought into sharp focus the need for everyone, regardless of their employment status, to be able to find good quality, rewarding work; be able to work in the way they choose; and have access to adequate social protections and benefits,” the company states. “COVID-19 has revealed the fundamental inequity of our current employment system, in which some workers get benefits and protections, while others don’t. Outdated legal frameworks are forcing platforms and workers to make a choice between flexibility or security at precisely the moment when both flexibility and security are needed. … Uber’s platform can be a bridge to economic recovery if we establish a better standard of work for all who need it.”
For more information, visit the company’s website at www.Uber.com.
NetworkNewsWire (NNW) is a financial news and content distribution company that provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to nearly 2 million followers, (5) a full array of corporate communications solutions, and (6) a total news coverage solution with NNW Prime. As a multifaceted organization with an extensive team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, NNW brings its clients unparalleled visibility, recognition and brand awareness. NNW is where news, content and information converge.
To receive SMS text alerts from NetworkNewsWire, text “STOCKS” to 77948 (U.S. Mobile Phones Only)
For more information, please visit https://www.NetworkNewsWire.com
NetworkNewsWire is part of the InvestorBrandNetwork.