Uber CEO sees surge prices easing up by end of year
Uber has been struggling with high ride costs and long wait times throughout the pandemic. CNBC spoke to Dara Khosrowshahi on Tuesday, stating that this is likely to change in the second half.
The shift comes as more drivers return to its platform and supply and demand issues balance out, he said during a “Squawk Box” interview.
We identified the need for more drivers on our platform early in the process. Khosrowshahi explained that we used the second quarter to increase supply in America in order to revitalize our driver base. We are seeing the results of this early investment now in Q3.
He said that pricing will improve as the year progresses and that volume will increase.
Uber has spent hundreds of millions this past year in a bid to woo drivers to its platform to keep up with surging demand.
Some drivers, fearful of Covid, left the platform or paused services early on in the pandemic. Others decided food delivery was better and will continue to use it. Extended unemployment benefits were also available to some, but they are now being phased out.
Despite the continued, slow balancing out of supply and demand, Khosrowshahi said the company still isn’t where it wants to be. Uber expects to update drivers on its next earnings call in November.
Uber on Tuesday also adjusted its financial forecast, saying it could turn its first adjusted profit this quarter.
It expects that adjusted EBITDA will range between loss of $25m and profit of $25m. Uber stated previously that it expects its third-quarter adjusted EBITDA to exceed $100 million. Uber reiterated its belief that the fourth quarter should be profitable on an adjusted EBITDA base.
Khosrowshahi stated that “We are clearly on the road to profitability.”
Uber expects to book between $22.8 billion-$23.2 billion gross bookings in the current quarter. This is a slight adjustment from its $22 billion-24 billion forecast on its second-quarter earnings conference.