REUTERS: Ride hailing companies Uber Technologies Inc and Lyft Inc promised Wall Street they would be back on the road to profitability and growth by the time they reported second-quarter results this week, thanks to cost-cutting done to survive the pandemic.
But a rapid spread of the more contagious Delta variant has prompted several health authorities to reimpose some restrictions. The U.S. Centers for Disease Control and Prevention sounded alarms on Friday with a report that the Delta variant is as contagious as chicken pox and can be passed on by people who are vaccinated.
Lyft in May said it would take advantage of its leaner cost structure to make more money per ride as passengers return to the platform in greater numbers. Uber, also in May, said it would become profitable in the second half of 2021, requiring the company to quickly reduce losses.During the second quarter, when it appeared the coronavirus threat was receding, Uber and Lyft were focused on luring drivers back with large pay incentives.
Public data from regulators in Chicago and New York City, two of the companies' largest markets, shows a continued growth in trips and vehicles in recent months. "Uber has had a bumpy ride through the pandemic but fresh signs that it's becoming a much smoother journey are expected in the upcoming numbers," said Susannah Streeter, an analyst at Hargreaves Lansdown.
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