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Uber Eats, whose gross bookings more than doubled, continued its loss-making streak but narrowed losses. Photo: Reuters

Uber's food-delivery business doubles but Covid-19 eviscerates rides demand

  • Revenue at Uber Eats doubled to US$1.2 billion, boosted by greater demand for delivery as Americans largely continue to stay home
  • While Uber’s ride-hailing segment remained battered by the coronavirus crisis, it was the only segment generating an adjusted Ebitda profit, of US$50 million
Uber
Uber Technologies said demand for its food-delivery service more than doubled in the second quarter as many users remained largely homebound, while demand for ride-hailing trips was only marginally recovering from pandemic rock-bottom.

The company said that despite those larger challenges it is sticking to its goal of being profitable on an adjusted basis before the end of 2021 thanks to stringent cost-cutting measures and a strong balance sheet. Uber recorded an adjusted loss in earnings before interest, taxes, depreciation and amortisation of US$837 million in the second quarter.

Ride-hailing trips, in the past responsible for nearly two-thirds of Uber’s revenue, increased 5 percentage points from their low in April, but gross bookings remained down 75 per cent from last year.

The company on Thursday posted a US$1.8 billion net loss in the months from April to June, including charges related to the laying off of 23 per cent of its global workforce during a period when infections of the novel coronavirus continued to spread in the United States, Uber’s largest market.

The number of active platform users nearly halved year-over-year, from 99 million to 55 million.

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Uber’s second-quarter revenue fell 29 per cent to US$2.24 billion from the year prior, beating analysts’ average estimate of US$2.18 billion, according to IBES data from Refinitiv.

Revenue at Uber Eats doubled to US$1.2 billion, boosted by greater demand for delivery as Americans largely continue to stay home. Uber last month expanded its delivery reach by announcing the acquisition of Postmates for US$2.65 billion to expand the business of supplying everyday goods.

While Uber’s ride-hailing segment remained battered by the coronavirus crisis, it was the only segment generating an adjusted Ebitda profit, of US$50 million.

Uber Eats, whose gross bookings more than doubled, continued its loss-making streak but narrowed losses, recording a US$232 adjusted Ebitda loss in the second quarter.

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