Why Uber Prices Are Expected To Decrease, According To CEO

After months of high prices, Uber prices are expected to lower by the end of the year, CEO Dara Khosrowshahi told CNBC on Tuesday.

The growing Uber rate is due to the combination of the app’s driver shortage and increased demand. After a year of investing millions in its driver to keep up with renewed user activity, Uber is expecting prices to lower as supply and demand finally balance out by this year’s fourth quarter, Khosrowshahi explained.

“What we did was, early on we identified our need to bring on more drivers onto the platform. So, in the second quarter, we really leaned into supply, especially in the United States, to reinvigorate our driver base and grow our driver base in the U.S.” Khosrowshahi said. “We’re seeing that now, the benefits of that early investment, in Q3.”

“I do think what we’ll see is pricing is going to ease up as we go into the back half of the year and volume will especially accelerate,” he added.

On Tuesday, Uber also posted its first adjusted profit forecast to a loss of $25 million and a profit of $25 million. This is a stark adjustment compared to its initial forecasted loss of $100 million for its adjusted EBITDA, which measures earnings before interest, taxes, depreciation and amortization.

“We are very clearly on the path to profitability,” Khosrowshahi told CNBC.

The recent increase in hiring and benefits for its employees comes as Uber expects a continued demand surge as it heads into the holiday season.

Uber’s stocks jumped over 12% in response to the positive financial outlook.