UBER FACES LOSSES

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By Chahat Chawla & Aiman Muskan, Kalindi College

Uber is an American tech company, whose primary services include ride-hailing and food delivery. On Wednesday, 3rd August ‘21, Uber announced an adjusted $509 million dollar loss in its second quarter before depreciation, interest and taxes, increased by $150 million as compared to the first quarter. The loss was wider than what was predicted by the analysts which led to Uber shares decline of 6 % in- after hours trading after closing the day down by 2.2 %. Many people believe the company had to lure back their employees and hence had to spend heavily. UberEats, which is the restaurant delivery system of Uber, has proved to be a saviour and has narrowed the losses on a quarterly basis.


Credit: Google Images


But, the company said that the drivers and the food delivery workers had surged upto 50 % in 5 months and the company had spent approximately $250 million in driver incentives investment thereby widening the losses in the second quarter. Observing the Pandemic and a transition in the choices of the consumer, Uber has now moved its focus towards its saviour, UberEats by acquiring startups like “Postmates”. It is also planning to expand the essentials and grocery delivery business by partnering with companies like “Albertson Inc.”. It is believed that this change will hopefully decrease losses of Uber to a significant level in the coming quarters.



Source: Economic Times, Business Insider, Aljazeera

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