As fears of a recession continue to cripple markets across the globe, Uber stock continues its freefall. Today as markets continued the sharp downturn of recent weeks, Uber followed suit. But, in reality, what does this all mean for Uber drivers and rideshare drivers in general? The good news is that Uber isn’t going anywhere despite its great dive, but it does mean that unexpected changes might be coming soon.
Why is Uber stock losing so much value?
Uber Technologies released its second-quarter earnings report with a stunning $5.2 billion loss.
It is the first domino that explains Uber’s precipitous plunge. Alongside this second-quarter earnings report, Uber’s rival Lyft posted better than expected earnings. This factor only served to hasten a deeper fall for Uber. When you take into consideration the market itself is quite poised on the edge of recession, it is no wonder.
Is Uber going down in flames?
Not at all — at least not yet. Three factors played into the major loss posted by the rideshare giant: (1) Uber stock compensation, (2) driver rewards, and (3) research and development played a large part.
While only $300 million were dolled out for drivers, an astonishing $3 billion was spent on research. Self-driving cars, e-bikes, public transportation options, and more combined with $2.06 billion in stock compensation that stifled the report. Ultimately, these things are not a significant concern at this time for Uber.
What does this mean for drivers?
Will we be getting a fare raise soon? Probably not, though Uber might begin to take cues from Lyft who believes that the path to profitability is in raising prices. Whether or not that price hike will trickle down to the drivers is unknown at this time.
Because of Uber’s scope and scale, they might be able to leverage this idea to right the ship. But this is strictly conjectured at this time.
Watch Uber stock over the next few months
As Uber continues its journey past its initial public offering, drivers should keep a keen eye on all things Uber in the news.
I will do my best to report what catches my eye, what is relevant to us as drivers, and what we can do to potentially better our position. If you find a topic you think is imperative for drivers, please feel free to reach out. I want to cover topics that are helpful and illuminating for all rideshare drivers.
Watching Uber stock is one way of gauging our potential future as drivers, so keep an eye out for future stock drops or recoveries.
Uber’s diversity is its golden goose…
As drivers, our primary concern is often simply driving folks around with UberX and the like. However, Uber and its valuation are often gauged on more. With Uber focusing heavily in product research and development, we should expect that they will be expanding their services further. While Uber Technologies often loses money on the many rides we give, it is making money on other prospects. What does that mean for us?
Well, with a heavy dose of investment in self-driving cars, drones, and others, it means we are eventually out of a gig. Of course, whether that’s in the near future or not, no one can tell. For now, let’s not think about quitting —yet. Let’s take advantage of the opportunities that come our way.
[…] markets closed on Tuesday, Uber and Lyft both fell to new lows. Uber closed down 5.7% to $30.70, a deep dive below the previous mark of $32.57 in August. Lyft closed down 7.2% to $45.42, a steep plunge below the low of $48.15 in […]