Watch: The Titan Flash on Uber's latest product update

Friday, Jun 24th 2022

Commentary

Jack, from your Investor Relations team, covers Uber's latest product update.

Uber, a holding in our Flagship strategy, announced on Tuesday that it plans to bring back its Uber Pool under a new brand: UberX Share. Originating from the hallowed grounds of neighborhood carpools to and from the little league fields, the product was sunset when ride sharing, literally and figuratively, took a back seat to the pandemic-driven needs for social distancing.

Uber’s leadership was transparent earlier this year that the markets are demanding a new normal with a focus on profitability and free cash flow versus growth at all costs. We think this product addition is noteworthy for investors for two reasons:

First - Uber prices have been close to their highest levels on record as a function of rising gas prices. UberX Share will, hopefully, ease this price burden by offering riders an up front discount for selecting a share, and an additional 20% off the total price if another rider is picked up along the way. This feature may bring cost conscious riders back to the Uber ecosystem while providing relief to consumers that are already feeling cash strapped from inflationary pressures.

Second - by servicing more passengers in the same amount of time, UberX Share aims to relieve the supply / demand constraints that have hurt the marketplace in the past. With a tight labor market and a commitment to curb hiring, moves to curtail these pressures while avoiding additional fixed costs may allow for margin expansion. We feel this is a positive for the company’s prospects for long term profitability.

The product update comes at a moment when labor shortages are high, gas prices are higher, and carbon emissions from individual vehicles are highest. All of these metrics need to be lowered, and this move is Uber’s attempt to kill three birds with one shared cab.

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