Uber (NYSE:UBER)
In an earnings call with analysts, Uber (NYSE:UBER) CEO Dara Khosrowshahi discussed the industry’s current state of affairs, including the growth of ride-sharing services and the rise of food delivery services.
On a down day for markets, Uber stock gained more than 9% in a single session. Uber’s (UBER) senior executive said that although the company’s headline numbers and bookings projections were both encouraging, advertising may be an underappreciated source of revenue growth.
During a Tuesday morning Q&A with analysts, he said, “We talked about the number of advertisers using our products, growing 70% to 345,000 businesses.” On the mobile front, Journey Ads is gaining a lot of traction. We are receiving premium CPMs from these Journey Ads since the Uber user represents a desirable demographic for advertisers. Their average age is much lower. Consequently, they are more receptive to top-tier advertisements and products. Movement is typical for them. They like city life and often travel. People are on the go and willing to spend. As a result, the cost per thousand impressions (CPM) for our mobile advertisers is quite expensive.
Khosrowshahi also said that the corporation is considering installing ads on the roofs of vehicles, similar to the taxi taxis in New York City. Car toppers will increase a driver’s weekly earnings by an average of $100. Thus the new commercials are also anticipated to help with driver retention.
Uber stock main rival in the United States, Lyft, also places a premium on attracting and retaining drivers. Regarding rivals, Uber’s CEO brought up that Lyft is now through a period of transformation.
We’re witnessing on the home front with Lyft that the company is undergoing significant transformation. It’s a very popular name in the market that shows no signs of fading away, and they are trying to undercut our prices. This fosters an atmosphere where brand and service, ETAs, accuracy, reliability, etc., are all competition points. As a result, he told investors, “We think it establishes a constructive competitive environment going forward.” The days of paying for stock and, in effect, borrowing from shareholders to acquire a stock on the cheap are passed, as the market has made quite obvious. Because of this, competition in the technology industry as a whole, and in our market in particular, will ultimately be beneficial.
During a day of stock market volatility, Uber’s stock price climbed 9.29% at midday, while Lyft’s rose only about 0.3%.
Featured Image: Pexels @ Max Chen
