Uber CEO sees price hikes cut prices by year-end

Uber CEO sees price hikes cut prices by year-end

Uber has battled high transportation costs and long wait times throughout the pandemic. But that should change as the company enters the second half of its year, CEO Dara Khosrowshahi told CNBC on Tuesday.

During an interview with “Squawk Box”, he said the change comes as more and more drivers return to their rig and balance supply and demand issues.

“What we’ve done is we’ve identified our need to bring more drivers to the platform. So in the second quarter, we really looked at supply, especially in the United States, to strengthen our engine base. And to grow our driver base in America, ”said Khosrowshahi. “We’re seeing that now, the benefits of that initial investment, in the third quarter. “

“I think what we’ll see will be some easing in prices as we move into the second half of the year and volumes will accelerate dramatically,” he said.

Uber spent crore this year last year to entice drivers to its platform to meet growing demand.

Some drivers, for fear of COVID, left the platform or stopped services at the start of the pandemic. Others saw food delivery as a better option and planned to stick with it. Extended unemployment benefits have also met the needs of some people, although they have been phased out.

Despite the constant and slow balance of supply and demand, Khosrowshahi said the business was still not where it wanted to be. Uber will likely provide updates on specific driver numbers in its next results call, due in November.

Uber also adjusted its financial forecast on Tuesday, saying it could make its first adjusted profit this quarter.

The company expects Adjusted EBITDA – earnings before interest, taxes, depreciation and amortization – to be between a loss of $ 25 million and a profit of $ 25 million. Uber previously said it expects Adjusted EBITDA for the third quarter to be better than a loss of $ 100 million. Uber reiterated that, on an adjusted EBITDA basis, it is expected to make a profit in the fourth quarter.

“We are very clearly on the path to profitability,” Khosrowshahi said.

Uber is also forecasting between $ 22.8 billion and $ 23.2 billion in gross bookings for the current quarter, up from $ 22 to 24 billion expected in its second quarter earnings call.

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