Uber’s food delivery business doubles but demand for rides falters
Uber said demand for its food-delivery service doubled in the second quarter as users were locked down due to the pandemic, while demand for rides was hit.
The company maintained it was sticking to its goal of being profitable on an adjusted basis before the end of next year. Today it reported that revenue in the second quarter fell 29 per cent to $2.24bn, beating analysts’ estimates of $2.18bn.
Uber posted a $1.8bn net loss between April and June, which includes charges related to the laying off of 23 per cent of its workforce worldwide.
After coronavirus started to make a real impact on the US, the firm moved to lay off a number of staff. It also offloaded its Jump electric bike business to bike-sharing competitor Lime.
Despite taking drastic cost-cutting measures, Uber announcced to buy Postmates, an on-demand delivery service, for $2.65bn in stock.
The technology firm reported an adjusted loss in Ebitda of $837m in the second quarter. Ride-hailing trips, which have in the past accounted for nearly two-thirds of Uber’s revenue, increased five per cent from their low in April. However gross bookings remain down 75 per cent from last year to $10.2bn.
Revenue at Uber Eats doubled to $1.2bn, helped by a greater demand for delivery as customers continued to stay at home. While gross bookings more than doubled, it recorded a $232 adjusted Ebitda loss in the second quarter.
Uber also reported a drop off in active platform users from 99m to 55m.
The firm is also facing mounting legal battles as authorities continue to question whether it can treat drivers in the US as independent contractors.
On Wednesday, the California Labor Commission’s office announced it had filed separate lawsuits against Uber and rival Lyft accusing them of committing wage theft by misclassifying drivers as contractors rather than employees.