Uber losses narrow as delivery growth outpaces fall in ride-sharing

Uber-losses narrow-as-delivery-growth-outpaces-fall-in-ride-sharing

February 12, 2021: On Wednesday, Uber stock fell above 3% after the bell as the company delivers mixed fourth-quarter results of its earnings, as its ride-hailing business recovers slowly and its delivery business booms.

The company is still losing about $1 billion a quarter on a GAAP basis.

Overall, it lost $968 million on a GAAP basis during the quarter, an improvement from a year ago when losses amounted to $1.1 billion.

In the whole of 2020, Uber’s net loss is about $6.77 billion, which is around a 20% improvement from a staggering $8.51 billion loss in the year 2019.

While delivery is still far away in bookings, in terms of revenue, Uber’s core ride-hailing business has surpassed delivery slightly for the first time since the Covid-19 pandemic started.

On Wednesday, CEO Dara Khosrowshahi said on earnings call that Uber sees “many opportunities” in the mobility segment as different regions recover from the pandemic.

Last year in August, Uber acquired a marketplace tech company, Autocab, that connects riders with local taxi operators. Khosrowshahi suggested as travel and commuting begin to increase, taxis will be in demand, and it can benefit.

At the beginning of this month, the company shared the plans to acquire alcohol delivery app Drizly which was on demand, which the company plans to integrate into Uber Eats, its food-delivery service. The deal was valued at $1.1 billion in stock and cash combined, uber said in a statement.

On Wednesday, the company said that restaurants on Uber Eat exceeded 600,000 in the fourth quarter, with Union Square Hospitality Group establishments, Chipotle locations in the U.K., Wings Etc.

CEO of Uber, Dara Khosrowshahi, talked up the company’s membership and advertising businesses in the last quarter. She said in select U.S. cities, and Uber saw glimmers of recovery from the pandemic.

Uber Pass and Uber Eats Pass had at that time racked up more than 1 million paying members. The company now has more than 5 million members, according to the company’s fourth-quarter note to investors.

On Wednesday, Khosrowshahi said that as it gets a higher percentage of customers who pay for memberships over time, he expects the market cost to decrease.

The company is still early in the development of Eats Pass and will focus on “improving restaurant selection” to win new customers and members, he noted.

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