Then the pandemic hit and Uber and its many competitors were seriously in the dwang because of the slight problem of a lack of customers. Uber listed at around $42 and hit $15 at one point.
Uber takes somewhere between 15% and 20% of their income. I think there may be a lot of truth in this claim, but you can see the problem from Uber’s point of view too; driving is very dangerous and the potential losses in the case of car accidents is very high. Economically, it makes more sense for drivers to bear that risk.
The first contradiction to CW, as we might call it, was that Uber SA was making money before the pandemic — and getting into trouble with HQ for doing so! It shows how important scale rather than profitability was to the company. But it also shows how the unit economics of ride-sharing in SA are much better because the alternatives are so awful.
Anyway, Uber has just published its second quarter results, and hey presto, it seems like the conventional wisdom was wrong. Revenue, quarter-on-quarter, doubled and the company was cash-flow positive for the first time, to the tune of $364-million. The share price just popped 10%.The company still had a $750-million operational loss in three months, but this was a lot less than the $1.2-billion operational loss in the previous three months.
Well that's 5 mins I'll never get back
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