Uber Technologies (UBER) has launched its shared rides under the new name UberX Share, according to Reuters. The renewed service will be operational in Miami for the time being.
The announcement pushed shares of the mobility services provider up 4.9% on November 16 to close at $45.76. (See Uber stock charts on TipRanks)
With the relaunch, the company targets to bring down previous losses in its pooled rides segment. However, the company did not provide any further details on its expansion plans for shared rides in other cities.
Due to the COVID-19 pandemic, the company’s previous share ride service, Uber Pool, was suspended in March 2020.
Details of UberX Share Rides
Under the Uberx Share Rides, customers will have the option to share a ride with one person. UberX Share rides will also offer an upfront discount of 5%.
Furthermore, passengers can earn Uber credit if another person joins in to share the trip. The Uber credit will be a minimum of $2 and up to 30% of the price. However, Uber Pool offered discounts as high as 50%.
During pre-pandemic times, passengers booked a discounted pool ride. However, according to Chicago city data, 25% to 40% of the booked shared rides ended up as a single ride without the passengers having to share the trip with another person.
As a result, the company stated in the past that it was incurring huge losses due to shared ride discounts.
Uber’s competitor, Lyft Inc. (LYFT) also restarted shared rides in July this year after suspending the same in March 2020 due to the pandemic.
Wall Street’s Take
Last week, BTIG analyst Jake Fuller reiterated a Buy rating on Uber Technologies with a price target of $80 (74.83% upside potential).
Consensus among analysts is a Strong Buy based on 19 Buys and 1 Holds. The average Uber price target of $69.75 implies upside potential of 52.43% from current levels.