Uber gets green light to chase U.S. government contracts
Uber Technologies Inc. won approval to serve as a business vendor to the U.S. government, enabling the ride-hailing giant to vie for an estimated $810 million in spending over the next five years.
Politicians and campaigns have for years relied on Uber for rides to and catering for their events, but the decision Monday is the first clearance for federal agencies to sign contracts with the company. It’s a rare bright spot as Uber struggles to adjust to the effects of the coronavirus pandemic.
Demand for rides has tanked since last month, upending growth plans for the business. Uber previously anticipated it would deliver a quarterly profit by the end of the year. On Friday, the San Francisco-based company yanked its 2020 forecast and said it will write down the value of its minority investments by about $2 billion.
Uber has been looking to add new sources of revenue to make up for the sharp decline in ridership. The company said this month that it’s accelerating the rollout of an option for businesses to deliver meals to their employees at home. This week, Uber said it’s expanding a courier service for customers and product delivery from stores.
The government clearance removes a substantial hurdle for selling to agencies, but revenue isn’t assured. The U.S. expects to spend $810 million through 2025 on ride-hailing services, according to an Uber spokesman, citing an estimate by the General Services Administration. Uber must compete for those contracts.
Thousands of California drivers have filed wage claims against Uber and Lyft since February, hoping to pressure the state of California into enforcing a law preventing worker misclassification.
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