In a bold move that mirrors its transformative impact on the global taxi sector, ride-hailing giant Uber is now eyeing the travel industry, specifically the holiday travel segment, as it seeks to broaden its service offerings within its app. CEO Dara Khosrowshahi revealed these ambitions as the company reported its inaugural global operating profit, marking a pivotal milestone in its evolution.
The surge in Uber’s operations coincided with an exceptional upswing in the number of rides taken this spring, underscoring the resurgence of travel activity as regions grapple with the aftermath of the pandemic. Notably, the ride-hail platform registered an average of about 25 million daily trips during the April-June period, reflecting an impressive 22% year-on-year surge. These figures, amounting to a staggering nearly 2.3 billion rides in the quarter, illuminate a vigorous rebound in North American travel.
Against this backdrop, Dara Khosrowshahi identified an opportune moment for Uber to establish itself as a dominant player, particularly within the UK market where travel agencies retain a more prominent role compared to other regions, such as the US. The company has already introduced features allowing users to book flights, trains, and coaches via the app in the UK, with the aim of further expanding these services.
“Travel is a very important ecosystem for us, both in terms of pick-ups and drop-offs, so we said hey, why can’t we go after this tour operator market?” Khosrowshahi outlined. “Essentially we are building up services that we think rival traditional tour operators.”
Despite these expansions, Uber’s foundational taxi service has displayed resilience, quelling concerns that the new offerings might cannibalize its core business. Khosrowshahi’s tenure as CEO, inaugurated in 2017, was marked by a commitment to recalibrate the company following a series of scandals, privacy breaches, and the departure of its founder.
Khosrowshahi’s unwavering focus on bolstering profitability has resulted in a positive financial trajectory. In the April-June period, Uber’s underlying ride-hailing, food delivery, and freight divisions collectively registered a profit of $326 million, a marked improvement from the $713 million loss incurred in the same interval the prior year. This impressive turnaround is attributed to stringent cost management, including layoffs and strategic measures.
Uber’s revenue exhibited a robust 14% year-on-year increase, reaching $9.2 billion, while cost escalation remained relatively modest at around 2%. Notably, revenue growth was most pronounced beyond the US and Canada, with these regions affected by a contraction in the firm’s smaller freight unit. In a noteworthy recovery, Uber’s taxi operations, adversely affected by pandemic-related travel restrictions and driver shortages, have begun to regain momentum, while its food delivery segment maintains its robust performance.
