Uber's (very) low-key $810M government contract win could be a game-changer
Extremely Quiet & Incredibly Vague... While casually perusing the US General Services Administration website (as we often do for fun), we noticed an interesting update: Uber just got the greenlight to sell its services to the US government, allowing it to compete for $810M worth of gov spending over the next 5 years.
- Back in November, Uncle Sam was looking to find the best vendor for its future "Governmentwide Rideshare/Ride-hail Passenger Services to meet the on-demand passenger transportation needs of Federal employees while carrying out official duties." TLDR: Expensed rides for gov-employees.
- Uber responded to this Request for Proposal, outlining how it can be the best gov-employee transporting service thanks to its massive fleet, emailed receipts, safety, etc. Must have been convincing, since Uber won approval to serve as a vendor.
Pass the red tape... Since these projects are funded by taxpayer money, vendors have to jump through hoops for approval. The gov needs to ensure contracts are awarded fairly, to the most deserving company at the best price. No bribery, corruption, or waste. Uber will have to do more red tape dancing if it wants the full $810M to cruise Nancy or Mitch from marble building to marble building.
This could be a game changer for Uber... This almost uni-contract ("unicorn contract") would be a huge boost to Uber's ride-hail biz, which has been struggling during the corona-crisis on near-zero demand.
- Spending on Uber rides has dropped over 80% in March — Uber just yanked its 2020 forecast and wrote down $2B in losses for its investments.
- If Uber gets the whole $810M, that would equal 6% of its total annual revenue. The US government has 2.1M full-time employees, meaning lots of steady long-term business.