Uber announces $250 million as stimulus package to help their drivers
Signaling a rise in demand for its ride-hailing business, on Monday Uber posted a record gross bookings for March month.
Tech giant suffered huge losses during the coronavirus pandemic as the lockdown caused a decline in demand for cabs. However, their food delivery saw huge success which helped them decrease the overall loss.
Since March 2020, last month, Uber saw a significant rise in demand for their cab service. As per them, it was a $30 billion annual run rate in March 20021 with a 9% growth compared to its previous month. It’s delivery business annual rate touched the mark of $52 billion, accounting for more than double from last year.
Uber held the vaccination programs responsible for such a high growth rate. In a filing with the Securities and Exchange Commission, it said, “As vaccination rates increase in the US, we are observing that the consumer demand for mobility is recovering faster than the availability of drivers, and consumer demand for delivery continues to exceed courier availability.”
In order to get the drivers back on road, Uber announced plans last week to spend $250 million as a “one-time stimulus package”. The money will go towards guaranteed pay, onboarding new drivers and bonuses for the drivers.
Last year, Uber suffered a loss of around $6.8 billion and wondered whether their business model works. The company believes that it will be profitable again by the end of 2021. Uber’s main competitor in The States, Lyft, has somewhat made the same commitment. Shares of Uber went up by 2% in the U.S. premarket trading.
After U.K.’s supreme court ruled that their drivers are to be treated as workers and not as independent contractors, Uber rehired 70,000 all of its U.K. drivers as workers ensuring them, minimum wages and other employment protection.