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  • Uber will likely still turn a profit by the end of next year despite the pandemic setbacks, JPMorgan said Friday. 
  • However, the bank’s analysts said the recovery has been stalled as COVID-19 cases show no sign of slowing in the US, and a second wave hits other countries.
  • A resurgence of cases and lockdown orders in international markets may also be a negative, they said. 
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The US’s failure to contain its coronavirus outbreak coupled with a resurgence in cases abroad could be bad news for Uber’s recovery.


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JPMorgan analysts said Friday that they now expect the company’s rebound from a virtual shutdown of its core ride-hailing business to be slower than expected.

“Recent engagement data suggests the US continues to see rides rebound slowly, especially on the West Coast, while recovery seems to have flattened in some Int’l cities that have seen a resurgence of COVID-19 cases,” the analysts, led by Doug Anmuth, said in their note to clients.

“While we haven’t seen a noticeable decline,” they continue, “the resurgence of cases in France, Spain, and the UK poses a risk as governments employ partial lockdowns to control the pandemic’s spread.”

The bank now expects Uber to turn a profit by the third quarter of 2021, roughly one year from now. That’s in line with the company’s own forecast, thanks in part to a business model that allows costs to shrink in-step with a slowdown in order or ride volumes. A massive surge in delivery demand during the pandemic also helped.

Shares of Uber were up 2% in trading Friday following the restrained optimism from JPMorgan, which re-iterated its buy rating for the stock.

Lyft hasn’t fared as well

Lyft, which only operates competing services in North America, is seeing its rides business bounce back at about the same cadence as Uber. But without a food-delivery business to bolster a 54% decline in rides in August compared to last year, JPMorgan projects it won’t reach profitability until the end of 2021. 

Shares of Lyft also rose slightly, about 1.4%, on Friday.

Proposition 22, a November ballot measure supported by both companies and other gig-economy startups, appears to be gaining strength. The law would provide an alternative to classifying drivers and couriers as employees, instead paying into a central benefits fund that would follow workers between jobs in the ecosystem.

A poll by Berkeley this month found 39% of voters are likely supportive, with only 26% likely to oppose. A notable 39% are undecided, leading JPMorgan to expect “heavy spend from the Prop 22 coalition in the coming days as they try to educate voters, and need more than 50% of the vote to pass the ballot.”

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