Uber shares have risen in anticipation of a strong tourist season

Shares of the car rental service with a driver Uber Technologies Inc. (UBER) rose by 7.6% to $30.74 at the auction on March 11. The reason was the statement of Uber management about the expected “one of the strongest in history” tourist season. Uber announced an improvement in its financial forecast for the current year.

The company now expects adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) earnings between $130-150 million, whereas previously estimated $100-130 million. Uber CEO Dara Khosrowshahi said that his company’s business is recovering from the omicron strain much faster than expected. The pandemic has put a lot of pressure on Uber’s business, and besides a decrease in consumer activity during self-isolation, there was a serious problem with a shortage of staff. Now the situation has improved, and the demand for trips is exploding.

Currently, Uber is making significant efforts to attract drivers by offering bonuses to reduce costs, including in connection with increased gasoline prices. The primary task in the current conditions remains the retention of drivers in the Uber ecosystem, as well as the creation of attractive conditions for the influx of new personnel.

A positive signal for Uber is the rapid recovery of demand for rides, as well as the continued increased (after COVID-19) demand for food delivery. In February 2022, the volume of transactions on the Uber platform amounted to 95% of the figure of February 2019, before the pandemic.

According to Dara Khosrowshahi, they observed growing demand in all segments of Uber, including commuting and nighttime activity of citizens, the principal sources of sustainable income for Uber. We expect additional momentum in Uber because of the return on activity in the tourism industry. In many countries, covid restrictions have completely, and consumers can realize the deferred demand.