By Hadassa Kalatizadeh
Uber, the ride-sharing giant, struggled with revenue loss due to Covid-19 concerns, but its CEO says demand is starting to pick up. CEO Dara Khosrowshahi said the company is seeing early signs that the ride-share company will fully recover following the pandemic.
On Thursday, Uber reported third-quarter revenues that missed Wall Street’s expectations, sending the stock price down roughly 4 percent in after-hours trading. The price subsequently picked up, however, following the company’s earnings call in which the CEO said there are early signs that its core ride-hailing business will fully recover from the Covid-19 pandemic. When asked in a CNBC interview as to how long the recovery would take, he responded that it’s hard to predict but it will depend on the overall health of the cities. “Uber comes back when cities come back. If anything, Uber is an advantaged form of transportation versus others,” Khosrowshahi said. He highlighted third-quarter improvements in 11 of the top 15 markets in the United States — including New York City, Chicago and Atlanta.
As per CNBC, in the third quarter, Uber reported an 18 percent decline in sales year-over-year. The company reported losses of 62 cents per share. Reported revenue was $3.13 billion, short of the expected $3.2 billion. Mobility adjusted net revenue, including Uber’s core Rides business, fell 52% year-over-year to $1.37 billion for the third quarter. On the up side, however, the company’s delivery adjusted net revenue, including from Uber Eats, jumped 190% year-over-year reaching $1.14 billion. More meals were ordered during the pandemic, which partially offset the understandable drop in commutes for the period.
With Uber’ food delivery business outpacing its core rides business, in July the company bought out the courier service Postmates, once an Uber Eats competitor. Earlier, it had also purchased Cornershop, a grocery delivery business, and last month it began making grocery deliveries in New York City. Khosrowshahi said Uber Eats now boasts 560,000 restaurants on its platform, including roughly 30 percent of restaurants in the US. The CEO declined to comment as to whether Uber’s delivery business was going to be bigger than its ride business in the long-term. He did say, however, that he believes the total addressable market for deliveries, like meals and groceries, was at least as large as the market for mobility.
Mr. Khosrowshahi said Uber rides themselves were coming back faster in many cities compared to other transportation alternatives, such as mass transit. He attributed this rider confidence to the company’s “no-mask-no-ride” policy.
