Uber launches $250 million to support drivers

Uber launches $250 million stimulus package to get drivers back on the road

Uber on Wednesday launched a $250 million one-time stimulus package aimed at getting drivers back on the road, as states begin to pull back some of their pandemic restrictions and roll out vaccines.

The company said that the stimuli will help welcome back existing drivers and “ensure first-time drivers do well as they learn the ropes.”

A spokesman for the company said the company will roll out payments over the next few months and will be delivered in a range of incentives.

In Austin, Texas, for example, drivers are ensured $1,100 if they do 115 trips. In Phoenix, AZ, drivers are guaranteed $1,775 if they do 200 trips.

This package according to the spokesman, will expand its guarantees in both those cities and other markets across the country.

Uber is anticipating an eventual rise in demand across its United States business. And as more drivers join the program, the higher earnings could drop.

“We want drivers to take advantage of higher earnings now because this is likely a temporary situation. As the recovery continues, we expect more drivers will be hitting the road, which means that over time earnings will come back to pre-Covid levels”.

Rideshare companies saw a dramatic drop in demand over the past year, as the coronavirus pandemic deeply restricted travel and daily activities.

Even as ridesharing volumes plunged amid the pandemic, Uber and Lyft, the two main U.S. players in ridesharing, have committed to become profitable by the end of 2021 on an adjusted EBITDA basis.

In Q4 of 2020, Uber lost $454 million on an adjusted EBITDA basis, and $968 million on a GAAP basis, on quarterly revenue of $3.17 billion. Uber shares closed down 2%.