Uber Posts Record Rider Demand in March -- 5th Update

By Dave Sebastian and Preetika Rana 

Uber Technologies Inc. reported record monthly bookings for March as Covid-19 vaccination rates accelerated across the U.S.

The company said Monday that it received more bookings in March than in any single month since it was founded in 2009. Uber's mobility business, which was decimated during the coronavirus pandemic and includes its core ride-hailing operations, had its best month since March 2020. Meanwhile, its food-delivery unit posted record monthly bookings, with business more than doubling year-over-year.

Rival Lyft Inc. said last month that its weekly rides bookings in March had rebounded to pre-pandemic levels.

But both companies face a daunting challenge: not enough drivers to meet surging demand. The companies don't employ their drivers, relying instead on gig workers to ferry their passengers. As demand for Uber and Lyft rides plummeted during the pandemic, many gig workers turned to work for grocers and food-delivery providers, among other businesses that surged during the health crisis.

The latest round of stimulus checks has also adversely affected driver supply, according to a person familiar with the matter.

Uber acknowledged that ridership was recovering faster than driver availability. The company said earlier this month that it was spending $250 million on bonuses in an effort to boost driver availability in the near term. Lyft is offering bonuses for referring former drivers back to the app.

Both companies have overhauled their businesses during the health crisis, cutting staff and other expenses. Uber has shed some of its costly businesses, including its self-driving unit. The costs, combined with the uptick in Uber's food-delivery business, helped cushion the pandemic's damage to the company's core ride-hailing operations. Uber posted a narrower full-year loss in 2020 compared with the previous year.

The company said it expects to take a hit in the first quarter from claims related to a settlement process for U.K. drivers. The U.K.'s top court ruled in February that a group of former drivers for Uber was entitled to a minimum wage and other benefits while working for the company, dealing a setback to Uber and other gig-economy companies in world-wide disputes over their employment model.

Uber and Lyft won a regulatory battle in their home state of California late last year that exempted them from reclassifying their drivers as employees, eligible for broad employment benefits. They began offering some new benefits to drivers, however.

The companies have said they expect to become profitable by the end of the year on an adjusted basis before interest, taxes, depreciation and amortization.

Uber posted an adjusted Ebitda loss of $454 million in the fourth quarter of 2020, compared with a year-earlier loss of $615 million.

Uber's food-delivery unit has typically been a drag on its bottom line, but the company trimmed its losses as orders soared during the pandemic. Delivery also became a bigger part of Uber's business last year. The ride-hailing giant acquired small food-delivery rival Postmates Inc. and forayed into delivering groceries, medicines and alcohol.

Following the news Monday, Uber shares closed up 2.91% to $59.44. The stock has more than doubled over the past 12 months.

Write to Dave Sebastian at [e-mail] and Preetika Rana at [e-mail]

(END) Dow Jones Newswires

April 12, 2021 18:19 ET (22:19 GMT)

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