How Uber is navigating the biggest reopening challenges

Yahoo Finance’s Myles Udland and Brian Sozzi discuss how Uber is faring as the COVID-19 vaccine rollout continues.

Video transcript

BRIAN SOZZI: But let's turn our attention back to the markets. Myles, you write in the Morning Brief Newsletter today about one downside to the return of economic growth, and that was very much on display in Uber's pre-announcement yesterday.

MYLES UDLAND: Yeah, I mean, Uber, what a fascinating announcement from the company coming out within an 8-K yesterday. So total company gross bookings at a record high. The mix there still continues to favor the delivery business, which is now running at an annual run rate of a billion dollars in gross bookings per week. $52 billion booking there for annual run rate for Uber's delivery business.

But something that stood out to myself, Julie La Roche wrote about this on Yahoo Finance, I think anybody who read the release, this caught their attention, is Uber calling out an inability to have enough drivers or riders, couriers on the platform. Saying that demand both for rides and for deliveries currently exceeds the supply.

Now the company said they're going to have to invest in getting more folks onto the platform, but the way that we frame this in the Morning Brief here, is that the reopening trade is really only going to be limited by how much suppliers, whether that's a restaurant with enough tables, either because of staff or regulations, whether it's Uber with enough drivers, whether it's a vacation town with enough places for people to stay in, go on down the line, airlines with enough flights, enough staff, so on and forth, supply is really the limiting factor here as we get into the summer months.

Most people who, everybody who wants to be vaccinated will be able to be vaccinated by July 4 probably at the latest, even including today's Johnson & Johnson news. So the ability to go out and travel safely is going to be available for anybody who wanted a vaccine to make that possible as we get into the summer. And there is just not going to be enough supply for people to do all the things they want to do.

Now the market has received Uber's news fairly positively, because it still says that demand for its services continues to improve over time. And I think that's the main theme that investors will be looking for on any reopening trade in first quarter earnings. Are you continuing to see that sequential growth, whether it's weekly, monthly, and certainly at a minimum, quarterly. But I just thought it was a, Sozzi, a really fascinating announcement from the company, bringing together a lot of the themes that we see with various re-opening trades and put them all in one place.

BRIAN SOZZI: Well, it's also, no, that's a great point, Myles. And it's also worth bringing up, if you were an analyst here and you're on these conference calls, it may be high time to start asking executives, what are your plans on reskilling workers or hiring and attracting new workers here? Because I read that Uber release as, you know what? People don't want to be Uber drivers right now. There's so much competition for talent on the other side of the recovery here. What can Uber do?

MYLES UDLAND: Yeah. And you know, the NFIB out with its latest small business report, and that report has its own flaws, but in that report, a record number of small businesses say they were unable to fill a current job opening. Now again, some of the unemployment benefits, the enhanced unemployment benefits have made, forget about the cost benefit of getting sick or not getting sick, the actual economics of not working for some folks have been better to continue to receive unemployment rather than go seek employment.

But even backing out that small slice of the labor force, Sozzi, I think a lot of people are also looking at their lives and looking at what they were doing, what they weren't doing, what their opportunity set really is after the pandemic and saying, you know, maybe I don't need to settle for this, or maybe I'm ready to take a risk and pursue some career track that felt like it would have to be a huge leap pre pandemic. Now we all sort of realize how fragile the reality we construct for ourselves can be.

And I do wonder how many people are looking at past career tracks, whether those are service jobs, blue collar jobs, white collar jobs, and are really going to have a rethink around what they want to do with their lives so long as they have them after the pandemic. And I know that's getting kind of deep and abstract here, but you got a huge hole in employment and you've got a lot of corporations that have one set of expectations on how this hole is going to get filled, and I'm not sure workers are really on the same page there.