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Uber Technologies Inc. recently reported their fourth-quarter and full-year results, which showed a continued recovery from the effects of the coronavirus pandemic. However, it also showed how the company has continued to lose money and its revenue fell short of expectations despite encouraging signs in both ridesharing and food delivery.
As reported by Market Watch, Uber’s chief executive Dara Khosrowshahi said the company is seeing a ride-hailing rebound, although the numbers vary by country and use case. He also said Uber is recovering more quickly than taxis and transit, and is gaining new riders. “As markets come back, we’re seeing social-use cases come back, up 100% year over year,” he said during an earnings conference call quoted by Market Share. He also mentioned some work-related rides have also returned, but not airport traffic.
Khosrowshahi often referred to the “power” of Uber’s platform and brand, saying that’s what helped propel the company’s delivery business, which now has a user base of 5 million, up from 1 million last quarter. Other than the delivery of prepared food, Uber delivery now includes groceries, medication (in some states in the U.S.), and other goods. Uber also recently announced its purchase of Drizly, the country’s leading and profitable alcohol-delivery app.
“In the U.S., we’re growing at significant, triple-digit rates. We can’t tell how we’re doing versus all of our competition [in delivery]. But we think that we’re more than holding our own,” Khosrowshahi reportedly said.
Moreover, Uber acquired the food delivery service Postmates $2.65 billion last year. The company announced the deal a few months into the pandemic, as Eats looked like the most secure leg of its operation. Postmates is currently the fourth major meal delivery company in the U.S., and it earned 7% of the country’s meal delivery market in October. With Postmates’s customers, Uber Eats can pull ahead in Los Angeles. As of October 2020, Postmates is the top food delivery service in the city, according to data from Second Measure. Meanwhile, Uber Eats lags behind DoorDash and is on par with Grubhub.
It’s because of this that the acquisition of Drizly fits perfectly into Uber’s expanding delivery-focused approach. Add the fact that the company had a big win with the passage of Prop. 22 after pouring millions in support, and the deal makes even more sense. That lobbying campaign was done to avoid classifying its workers as employees, which all these new delivery services are all businesses that rely on contract workers.
Last year, the ridesharing part of the business was going through multiple legal turmoils, but Uber Eats was largely unaffected because of the rise in take out during the coronavirus pandemic. For the first time in the company’s history, Uber Eats brought in more revenue ($1.21 billion) than rides ($790 million) in the second quarter of 2020. Uber Eats’ bookings more than doubled from 2019, rising 103% to $1.21 billion.