The COVID-19 crisis continues to depress Uber’s finances even when its food delivery service, Uber Eats, has an increasing demand showing a growth of 162% year over year.
One of the grim realities caused by the coronavirus is the billions of losses of businesses that used to function just fine back when lockdowns weren’t implemented. As for Uber, it lost $1.8 billion in the last three months and continues to have less revenue, compared to its 2019 second quarter data. When the demand plummeted for Uber rides, so did the revenue.
What’s successful though is Uber Eats, which has become more of a utility than a luxury. According to The Verge, gross booking in Uber Eats has reached 113% year over year. When Uber made a deal that it will acquire Postmates for approximately $2.65 billion, it gave a glimpse of how bringing together the two companies’ apps can improve geographic focus areas and customer demographics. Both apps will continue to run separately and the companies are expected to finalize the deal in the first quarter of 2021.
“Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers. Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers,” said Postmates CEO Bastian Lehmann.
Uber’s Ongoing Legal Battles
Uber along with its competition, Lyft, have been sued for misclassifying drivers as independent contractors when instead they should be under AB-5, which was passed at the beginning of the year in California. California’s Labor Commissioner’s Office hopes to recover unpaid wages, interests, penalties, and reasonable attorney fees incurred by the office as well.
A hearing was held on Friday for which Lyft and Uber maintained that an injunction would mean they need to restructure the businesses that could prevent them from employing a lot of drivers whether full-time or part-time. This could mean more drivers will lose their jobs, worsening the job loss for drivers in this pandemic.