In the wake of rising inflation, Uber has been accused of profiting from their business model and increasing the cost of living. But according to CEO Travis Kalanick, this may actually be a blessing in disguise for his company’s bottom line. Find out why below!
A critical data on inflation for August caused markets to crash on Tuesday. Despite lowering gas costs, the consumer price index rose 0.1% for the month. However, the findings isn’t all awful for businesses like Uber.
which claimed that the inflationary climate may potentially be beneficial for its supply side.
On Monday, CEO Dara Khosrowshahi said on CNBC’s “TechCheck” that when costs grow and consumers pay more for necessities like food, more of them are deciding to drive for Uber.
In fact, according to 72% of American drivers, inflation was a factor in their decision to join up to drive for Uber, he claimed.
Although Khosrowshahi said that inflation was “everywhere,” Uber has not noticed any effects on its business.
One of the last reports the Fed will review before its meeting on September 20-21, the surprisingly high August data might result in more aggressive interest rate increases for longer than markets had anticipated.
The tech-heavy Nasdaq index fell 5% as a result of a larger decline in tech companies, which caused Uber shares to end the day Tuesday down more than 3%. However, with less reliance on gas prices these days (according to Khosrowshahi), rising rates may also lead to higher fares for passengers – meaning it could actually become cheaper and more affordable over time. The technology sector accounted for nearly half of the S&P 500 losses and therefore more responsibility falls on sectors like finance, materials, and energy if investors want an alternative to stocks.
Most importantly, however, is how this eventful day reflects how our economy is growing and changing at a rapid pace.
It’s possible that we have nothing to worry about in terms of inflation because recent data doesn’t indicate that we are approaching anything close to triple digits.