Uber reported a drop in the number of trips, but doubling food delivery orders Eats

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Uber reported a drop in the number of trips, but doubling food delivery orders Eats

10.08.2020 News

Shares of Uber, which rose on 16.7% since the beginning of the year, fell 2.65% after the close of trading on Thursday, in response to the results of the second quarter.

Uber management called the quarter “the hardest in history”, given the sharp drop in passenger traffic due to the COVID-19 pandemic. At the same time, the resumption of growth of the global business of the Uber taxi service will further depend on the ability of different countries to curb the incidence.

For the second quarter, which ended on June 30, Uber reported a loss of $ 1.02, which is $ 0.16 worse than analysts’ estimate of a loss of $ 0.86 per share. However, the rate is better than in the previous quarter and the corresponding quarter last year.

The total loss for the second quarter was $ 1.78 billion compared to a record loss of $ 3.17 billion in the second quarter of last year.

Total quarterly revenue fell by 30% and amounted $ 2.2 billion, that slightly exceeded the analytical estimates of $ 2.18 billion.

During the quarter Uber published balance of available cash and cash equivalents of $ 8.1 billion, compared to $ 13.7 billion year earlier.

The two main divisions of Uber showed very different results: general global taxi dropped by 73%, while overall order food delivery service Eats increased by 113%.

General ordering taxi was $ 3.05 billion., which is below the expected Wall Street $ 3.47 billion.

General order food serviced delivery of Eats totaled $ 6.96 billion., higher than the expected $ 6.57 billion.

Uber CEO Dara Khosrowshahi said that the pandemic “turned the service of food delivery from luxury to utilities”, stating that it does not expect a sharp drop in demand for Eats after the crisis, as consumers will have a habit of ordering food from home.

In Uber also noted the growing demand for local express delivery of small packages using UberX. According to the CEO, since its launch in early June, the service has made 3 million trips worldwide.

Concerning the global service taxi – in recent months, demand gradually recovering, but slowly. In the second quarter, travel in the leading US markets fell by 50-85%, but in leading European markets, including France, Spain and Germany, the number of trips decreased by only about 35% compared to last year.

To reduce the negative impact of the pandemic Uber closed or sold a business Eats in regions where the service does not bring profit, and dismissed about 14% of its staff (over 3500 employees). Uber has also sold its electric bicycle business Jump to a bicycle rental competitor called Lime, in which Uber is an investor.

Despite on the losses, Uber continued its expansion strategy, believing that broad international coverage would result in the company making a profit. In July, the company announced plans to buy Postmates, Eats’ competitor in the food delivery market, for $ 2.65 billion.

There is also a risk for Uber and its competitor Lyft of lawsuits that could force these companies to retrain their taxi drivers from contractors to employees, which will greatly increase companies’ labor costs and all the necessary benefits to their employees.

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