Uber Delivery Business Doubles As Ride-Hailing Slump Continues

Uber’s food delivery business nearly doubled year-on-year in the second quarter on lockdown-driven demand, but the growing business was unable to offset a massive slump in the company’s core ride-hailing business.

However, Uber said it is still aiming to become profitable on an adjusted basis sometime next year through cost-cutting measures and a strong overall financial position.

The company said it had seen a loss of $837 million (£642m) before interest, taxes, depreciation and amortisation for the second quarter.

Ride-hailing trips, which in the past have accounted for two-thirds of Uber’s revenues, increased only 5 percent from an April low, with gross bookings remaining down 75 percent year-on-year.

Marginal recovery

An improvement in the ride-hailing business depends on widely varying conditions around the world, said Uber chief executive Dara Khosrowshahi, with recovery so far led by East Asia.

“Our mobility recovery is clearly dependent on the public health situation in any given area,” Khosrowshahi said in a conference call with investors.

Hong Kong and New Zealand have at times during the quarter seen ride bookings exceeding their pre-Covid-19 levels, with trip requests in Germany, France and Spain up to as little as 35 percent below their levels during the same period last year.

In the US, by contrast, gross bookings remained 85 percent down in some cities.

Overall, Uber reported a loss of $1.8bn for the April to June period, including charges related to cutting 23 percent of its global workforce.

The number of Uber’s active users worldwide was nearly cut in half year-on-year from 99 million to 55 million, while second-quarter revenues declined 29 percent year-on-year to $2.24bn, above analysts’ expectations of $2.18bn.

Delivery demand

Uber Eats’ revenue doubled to $1.2bn due to higher demand, with Uber expanding its delivery business last month through the $2.65bn acquisition of Postmates.

Khosrowshahi said the delivery business had gone from being a “luxury to a utility”.

Combined US and Canada ride-hailing revenues declined to $1.25bn, but showed an EBITDA profit of $50m – Uber’s only unit in the black.

Uber last week expanded its ride-hailing reach in the UK with the purchase of Autocab for an undisclosed amount.

Uber Eats gross bookings nearly doubled, and the unit narrowed its losses with a $232m EBITDA loss for the quarter.

Uber said it exepects the unit’s third-quarter losses to be roughly the same, adding that it sees the food-delivery business becoming profitable in most countries within about two years.