As Uber’s stock dipped last June, investors were encouraged to buy shares while prices were still low.
This dip in the Uber stock price was due to the coronavirus pandemic lowering demand for ride-sharing services across the board, as potential customers remained in their homes indefinitely.
According to Investor Place, commuters now consider the usage of mass transit as a potential risk, due to the high volume of passengers these services have daily.
Commuters have instead started walking or biking for their transportation needs, which has affected the bottom line of ride-sharing giants, Uber and Lyft.
Biking over the bustle
While New York City has begun the steps to reopen, Indypendent reported that there were still people who self-enforce in order to avoid public transport.
Accordingly, the media outlet notes that bikers and pedestrians have outnumbered the cars in the streets of New York. Meanwhile, 50% of the traffic bridging Manhattan, Brooklyn, Queens are due to bike congestion, per the city Depart of Transportation.
New Jersey Transit’s head also reported that while they had also begun efforts to reopen, ridership was still at 93% below the normal.
Potentially safer options
For many, both Uber and Lyft have been considered good alternatives due to the safety protocols set in place for both the rider and driver.
This put the ride-sharing services in the same boat as air travel options, as airlines were known to be meticulous in the regular sanitization of their vehicles.
As for ride-sharing services, the general distance between driver and passenger, as well as the relative speed of travel within big cities, were seen as arguments for the safety of the service.
On the rebound
Research firm Needham thinks that Uber’s Q2 net income loss could come in short at US$275 million [AU$382.8 million], rather than its previous outlook of $360 million. Reports from Business Insider corroborate this.
However, experts think that the continued reopenings of businesses, along with less use of mass transit, will prove to be a winning combination for the Uber stock.
Moreover, Uber CEO Dara Khosrowshahi said, “the worst of the coronavirus might be behind the company and has its sights on becoming profitable next year,” per Market Realist.
The company has turned to cost-cutting, including workforce reduction, to achieve its profit target.