Amid plummeting demand for ride-hailing services, Uber has landed a solid piece of business that is sure to boost the morale of the startup ecosystem.
The General Services Administration of the US government has approved Uber as an official business vendor to the federal government, paving way for the company to land an estimated $810 million in billings through 2025.
Uber has been active in the market ever since the pandemic forced the ride-hailing company to suspend normal operations. The company has tied up with a number of other entities like grocery and retail chains, as well as courier services across India as well as other countries, to make up for the lost revenue. The company also started the “Ubermedic” service in India market to transport frontline medical personnel to and from the health care facilities. Uber also launched two new services, Uber Connect and Uber Direct yesterday. Under the new ventures, Uber will be delivering literally anything, ranging from pharmaceutical products, parcels, to pet supplies and medications.
“Throughout this crisis, we’ve been looking for new ways our platform can help move essential goods for businesses and consumers while providing new earning opportunities for drivers,” Uber CEO Dara Khosrowshahi said. “Our primary focus is the immediate: quickly adapting our technology to meet the evolving needs of communities and companies.”
Uber had recently withdrawn its 2020 booking and revenue guidance amid plummeting demand and had brought down the value of its minority investments by about $2 billion. The company had previously anticipated delivering a quarterly profit by the end of the year, but that seems a distant feat for now.
Uber has already been a reliable partner for politicians and campaigns over the years, but an official venture surely opens the gate for private firms to partner with federal agencies. There is one catch though. The $810 million figure is an estimate the US government expects to spend on ride-hailing services through 2025 and not a guaranteed revenue. Uber will still have to compete for the contracts anyway.