The return of ride sharing: Strong unit economics emerging from special driver incentives
Ride sharing demand recovered faster than drivers were coming back on the road, as stimulus money and health concerns weighed on their motivation to do so. As a result, Uber & Lyft spent a lot on driver incentives in the second quarter, impacting profitability.Our analysis of the situation shows three simple things:
• These incentives were spent over strong underlying unit economics, displaying incremental profitability in line with long term targets.
• Uber benefited from its scale, spending more overall, but less on a per driver basis.
• Now that incentives are tapering off, incremental unit economics are showing up strongly in the updated guide Uber shared yesterday.
Uber Technologies provides ride hailing services. The company develops application for road transportation, navigation, ride sharing, and payment processing solutions. The company serves customers in the United States and Canada, Latin America, Europe, Middle East, and Asia Pacific markets, excluding its discontinued China operations.
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