Shares of Uber Technologies Inc (NYSE: UBER) climbed by more than 10% on Tuesday as the ride-hailing company said it will break even or report a profit on an adjusted basis in the current quarter.
Uber expects to hit the milestone ahead of schedule on strong demand after the pandemic low and increased online food ordering.
CEO’s remarks on CNBC’s “Squawk Box”
For the fourth quarter, Uber forecasts up to $100 million in adjusted profit as its gross bookings now stand at 35% to 40% above the levels seen at the time of IPO. Commenting on the raised forecast, CEO Dara Khosrowshahi said on CNBC’s “Squawk Box”:
We identified, early on, the need to bring on more drivers to the platform. So, in Q2, we leaned into supply, especially in the U.S., to reinvigorate our driver base. We are now seeing the benefits of that early investment.
The announcement comes a month after a California judge struck down Proposition 22 as unconstitutional.
Surging ride prices to ease by the end of 2021
Last week was Uber’s best on record in terms of volumes, the chief executive added. Consequently, the California-based firm is seeing its margins recover to the historical levels.
In his interview with CNBC, Khosrowshahi also expressed confidence that higher ride prices will subside by the end of 2021.
Surge pricing is about balancing supply and demand. It attracts more drivers to areas where we have more demand than supply. In the past two weeks, we’ve added 5% more driver to the platforms and surge pricing now stands essentially at its lowest level since May and moving down as well.
The $84 billion company is still trading about 30% down from its year-to-date high in February.
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Wajeeh Khan
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