Uber is trying to adapt to an increasingly aggressive ride-sharing market. The alternatives are attractive and, not infrequently, come with lower rates. In Romania, you have Bolt and Free Now, in several western countries there is Lyft, and Uber drivers suffer.
Officials in several countries have forced Uber to treat its drivers as employees instead of employees. The mechanism was meant to be reflected in the provision of health insurance and other privileges to those who chose ride-sharing as their main source of income. Now, due to financial problems, the head of Uber seems to be wiping out previous commitments with a sponge.
Uber penalizes its drivers
“It is clear that the market is undergoing a seismic change and we need to react accordingly,” Dara Khosrowshahi told CNBC in an email to employees. In the same context, the general manager insisted that the idea of treating drivers as employees is a privilege.
From this point, Uber will try to focus on making a profit based on free cash flow, rather than EBITDA, he added to the boss of one of the most important players in the ride-hailing market.
The Uber announcement comes at a very difficult time for the company, one that is not helped by the constant rise in fuel prices in different parts of the world. In theory, there have been some surcharges in some countries to offset the price increases, but they are negligible in terms of fuel growth. The drivers of Lyft and Uber in the USA announced that they are taking the withdrawal from the platforms very seriously for this reason and described the compensation measures coming from the management of the companies as “insulting”.
Although the end of the pandemic in many parts of the world is very good news for ridesharing companies, the situation in the fuel market tends not to be profitable at all.