Shares of Uber Technologies Inc., which is scheduled to report fourth-quarter earnings Wednesday, have been riding high because of optimism about the company’s business prospects.
“With mass distribution likely by mid-2021, we expect consumer demand for Uber to show a significant snapback during the course of 2021 with the company potentially getting back to pre-COVID ridership by early 2022,” Wedbush Securities analysts wrote in a note to clients last month. “It was clear that the pandemic has led the company to really lean into delivery of food,” White said. “But it also led them to take more seriously the opportunity in essential and nonfood items.”
Wednesday, the company announced that it is committing $20 million to an initiative that includes waiving and reducing fees for local restaurants that use Uber Eats though July. It also said it would reduce delivery fees for consumers, putting pressure on rivals. DoorDash Inc. DASH, +4.85% and other companies have similar promotions, but investors will want to know how long Uber plans to essentially subsidize deliveries as it goes after market share.
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