UBER UPDATE INTL
ing $17.22 an hour. “This first-time regulation to form a floor for app driver earnings and give a modest first raise is a long time in the making,” Bhairavi Desai, executive director of the Taxi Workers Alliance, told NBC News. “It’s the first real attempt anywhere to stop app driver pay cuts, which is an Uber and Lyft business practice at the heart of poverty wages.” New York’s City Council authorised the commission to set pay stan- dards in August at the same time that it approved a cap on new vehicle licences for ride-hail services. Both yellow cab and ride-hail drivers have complained for years that the surge in app-based cars in New York has driven down pay across the industry, making it impossible for many drivers to earn a living. The new formula factors in drivers’ total working time and their time spent transporting fares in order to incentivise efficient use of drivers. The rules are intended to cut traffic congestion by reducing the amount of time drivers spend circling around in busy areas without fares, but that could result in longer waits for a journey. Taxi commission chairwoman Meera Joshi said she believes New Yorkers “are willing to pay a little more and wait a little longer so the people transporting them are able to provide for themselves and their families.” But Uber, which is pushing for congestion pricing as a way to unclog Manhattan traffic, said in a statement that the new rules “will lead to higher than necessary fare increases for riders while missing an opportunity to deal with congestion in Manhattan’s central busi- ness district.” Lyft said the rules “will undermine competition by allowing certain companies to pay drivers lower wages.” It called the new system “a step backward for New Yorkers.”
The bus service is the latest example of Uber’s experimenta- tion and innovation across Africa. For instance, Nairobi was the second city glob- ally after Hyderabad, India, where the ride- hailing service began testing the cash pay- ment methods. To reduce drivers’ operational costs and give riders more choices, the company has introduced various options including boda boda (motorcycle) and rickshaw services in Uganda and Tanzania respectively. Earlier this year, it launched quick low-cost trips around Nairobi by partnering with the Japanese carmaker Suzuki which supplied its drivers with the fuel-efficient Suzuki Alto model. Yet for Uber and other ride-hailing rivals, Egypt has not been an easy market to operate in. The country’s economy has been in the doldrums since the Arab Spring revolution in 2011 and compounded by the political instability that followed. Ride-sharing apps there have also faced the fury of taxi operators who accuse them of short-changing drivers and avoiding taxes. The ride-hailing services have also battled regulatory agencies: in March, an administrative court asked authorities to revoke both Uber and Careem’s licences, a decision that was later suspended by another court.
AND FINALLY
UBER LAUNCHES ITS FIRST BUS SERVICE IN EGYPT
Uber is expanding its imprint on public transportation—this time with the establishment of a bus service. The ride-hailing giant launched Uber Bus in Egypt on Tuesday December 4, the first country to roll out the service globally. The platform allows passengers to request for buses through the app, after which they are matched with other riders on the most suitable route. Riders are allowed to pay via cash or card and will only be able to request Uber Bus if their pickup and drop-off locations are within the currently-serviced neighborhoods in Cairo. According to Quartz Africa, the announcement comes as competi- tion for bus-booking services heats up across the Egyptian capital. With traffic-clogged roads and badly-maintained bus and train ser- vices that experience crashes, Uber’s rivals have all looked into creating cheaper and more reliable alternatives to public trans- portation. Launched in 2017, the startup Swvl has partnered with hundreds of buses in both Cairo and Alexandria and recently bagged “tens of millions of dollars” in their Series B funding round. The Dubai-head- quartered Careem has also launched its own bus service, with the aim of improving mobility around Cairo. Uber said it was launching the bus option as part of efforts to improve its service in Egypt. The north African nation is one of Uber’s fastest growing markets, with over 150,000 drivers giving rides through its app in 2017 alone. The company’s chief executive Dara Khosrowshahi also said they will invest in a $100 million Egyptian customer support centre and launched a simpler version of the app known as Uber Lite that works on Android phones and with low bandwidth.
JANUARY 2019
UBER CONTINUES TO LOSE MONEY AS IT INVESTS IN FUTURE GROWTH AREAS
Uber recently released its Q3 2018 financial results with its net loss- es increasing 32 per cent quarter over quarter to $939 million on a pro forma basis. Uber expected these losses as it continues to invest in future growth areas. On an earnings before interest, taxes, depreciation and amortisation basis (EBIDTA), Uber’s losses were $527 million, up about 21 per cent quarter over quarter. And as Uber prepares to go public, the company has started presenting the income statements with stock-based compensation. Ten years from now, Uber CEO Dara Khosrowshahi envisions its core ride-hailing business accounting for less than 50 per cent of Uber’s overall business, Khosrowshahi told TechCrunch. That means Uber expects businesses like Eats, scooters, bikes and freight to con- tribute to be more of Uber’s business, which requires Uber to invest heavily in those businesses. Revenue for Q3 was up five per cent quarter over quarter at $2.95 billion and up 38 per cent year over year. Meanwhile, gross bookings were up six per cent quarter over quarter and 34 per cent year over year at $12.7 billion. Uber, for the first time, has also broken out Eats specific gross book- ings, which the company says accounted for $2.1 billion of overall gross bookings and is growing over 150 percent year over year. Uber has stated its intention to expand Eats to cover 70 per cent of the U.S. population by the end of this year. This is Uber’s first quarterly earnings report under CFO Nelson Chai. Uber, which had been without a CFO for more than three years, brought on Chai just three months ago.
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