Uber Tries to Bring Drivers Back With Massive $250 Million Stimulus After $454 Million Loss in 2020 Q4

Urian B., Tech Times 07 April 2021, 08:04 pm

Uber has announced on Wednesday that they plan to spend a whopping $250 million one-time stimulus in hopes of getting drivers back on the road. This move was made as the state starts pulling back some of their strict pandemic restrictions and the roll out of vaccines.

Uber Rolls Out Incentives

The company announces that the incentives will help it welcome back a number of their already existing drivers and also ensure that first-time drivers will do well as they start learning the ropes. According to an Uber spokesperson, the company will be rolling out the payments over the course of the next few months and will also be offering a wide range of different incentives.

An example of this is over in Austin, where drivers will be guaranteed a clean $1,100 if they are able to do a total of 155 trips, according to the company. Over in Pheonix, Uber drivers will be given a total of $1,775 if they are capable of doing 200 trips in total.

Uber Anticipates 'Eventual Rise'

According to CNBC, Uber is currently anticipating the eventual rise in demand all across its United States business. This is as more and more drivers are joining the program and higher earnings start to drop.

The company also noted that they want drivers to be able to take advantage of the higher earnings as of the moment because this is also likely just a temporary situation. As the total recovery continues, the public can expect even more Uber drivers hitting the road which would also mean that the over time earnings will definitely come back to the pre-COVID levels they once were at.

Pandemic's Effect on Ridesharing

Rideshare companies were one of the many industries that were massively affected and have seen a huge drop in demand over the course of the previous year. The drop is seen to be the result of coronavirus pandemic causing deeply restricted travel in different forms as well as other daily activities. Even as the total ridesharing volumes have plummeted due to the pandemic, both Lyft and Uber, the two major US players in the ridesharing industry, have committed to still become profitable come the end of 2021 on the new adjusted EBITDA basis.

In the fourth quarter of 2020, Uber had reportedly lost a massive $454 million on an already adjusted EBITDA basis and a huge $968 million on the new GAAP basis, on a new quarterly revenue of $3.17 billion. This, of course, shows that the effects of the pandemic in play as well as riders struggling themselves in making due to the limited amount of people going out. Since a lot of people are staying in, Uber ridesharing has been crippled and the company is now looking for ways to be able to fix this problem.

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Written by Urian Buenconsejo