Uber Sees Demand Spike As Pandemic Wanes

A recent increase in demand for the ride-sharing service, Uber, might demonstrate that some consumers are ready to get out into the world again as COVID-19 vaccinations rise and cases remain at lower rates across the United States.

The Centers for Disease Control and Prevention’s COVID-19 Vaccine Tracker shows that 21.9% of the total population is fully vaccinated against the virus and 61.4% of people 65 years of age or older have been fully vaccinated. Daily trends in the amount of COVID-19 cases reported to the CDC also appear to remain at the lower rate that was reached in mid-February of this year.

In a filing with the U.S. Securities and Exchange Commission on Monday, Uber stated that its “total company Gross Bookings reached the highest monthly level in the company’s nearly 12-year history” in March 2021.

The company said that it has had its best month for its mobility business since March 2020, “crossing a $30 billion annualized Gross Bookings run-rate, with average daily Gross Bookings up 9% month-over-month.” It also set another all-time record in its delivery business, “crossing a $52 billion annualized Gross Bookings run-rate in March, growing more than 150% year-over-year.”

In the filing, Uber stated:

As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability. On April 7, Uber announced that it is increasing investments in driver incentives to improve driver availability in the near-term. We continue to believe that Uber is on track to reach quarterly Adjusted EBITDA profitability in 2021. 

The company experienced a difficult year during the pandemic and had to let go around 25% of its staff and get rid of some of its businesses, according to the Wall Street Journal. Since many drivers could not get enough trips to make the job worth their individual effort, they stopped providing the service. In response to the increase in demand, Uber recently announced an incentive program to get drivers back on the road.

Uber explained the program in a blog post last week, saying, “We’re launching a $250 million driver stimulus to boost already high earnings for drivers. Boosted incentives and guarantees will help welcome existing drivers back to Uber and ensure first-time drivers do well as they learn the ropes.” Even without the stimulus money, however, Uber said that drivers are making a higher income right now as there are more consumers than there are drivers to give them rides. The company said that in certain cities, drivers are making more money than usual. In Chicago, drivers are making $28.73 median earnings per hour and in Philadelphia, drivers see even more than that at $31.03 median earnings per hour.

The company also recently announced that beginning in mid-March of this year, private-hire drivers utilizing its mobility platform in the United Kingdom will be treated as workers at the company after a court in the U.K. decided that formerly-employed Uber drivers were entitled to receive benefits and a minimum wage while employed there. This is expected to deal a blow to the business in the first quarter.

The Monday filing addressed the court decision, saying, “Uber has announced a historical claims settlement process to UK drivers. As a result, Uber expects to record a significant accrual related to these historical claims and other related costs in its first quarter 2021 results.”

In its blog post, Uber added that it is still requiring all of its passengers to wear face masks even though one-third of the adult population in America have gotten at least one dose of the COVID-19 vaccine.

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