- Due to the pandemic, Uber ride-hail gross bookings, which plummeted over the last year, remained roughly flat from the last quarter and down 38% from the previous year;
- Food delivery, on the other hand, had a surge of 166% in demand;
- Uber’s CEO Dara Khosrowshahi highlighted Brazil, Mexico, and Chile among the markets in Latin America driving Uber Eats operations. At the same time, he said he expects the ride-hail demand to pick up shortly in markets highly affected by the pandemic, such as Brazil and India.
Uber on Wednesday said its food-delivery business continued to grow, but ride-hailing bookings were flat from the previous quarter until March. Its ride-hailing mobility business had to absorb a $600 million hit to account for a settlement with more than 70,000 UK drivers – the company will have to provide them with more benefits.
Uber posted an adjusted $359 million first-quarter loss before interest, taxes, depreciation, and amortization – a metric that excludes one-time costs, including stock-based compensation, narrowing losses by nearly $100 million from the previous quarter. Analysts, on average, had expected the company to report an adjusted EBITDA loss of around $452 million, Refinitiv data showed.
Uber has promised to be profitable on that metric by the end of the year, three months after its smaller ride-hail rival Lyft, which on Tuesday said it would report sustained adjusted profits starting in the third quarter.
Due to the pandemic, Uber ride-hail gross bookings, which plummeted over the last year, remained roughly flat from the last quarter and down 38% from the previous year. Food delivery, on the other hand, had a surge of 166% in demand.
Still, Uber as a whole registered a fall of 11% in revenue. The declines in the first quarter of 2021 over the same quarter last year occurred in the United States (-11%), EMEA (-52%, which includes the $600 million labor charge in the UK), and Latin America (-37%), the company’s second-largest market. The 138% growth in revenue in Asia only partially offset these declines.
In a conference with analysts this afternoon, Uber‘s CEO Dara Khosrowshahi highlighted Brazil, Mexico, and Chile among the markets in Latin America driving Uber Eats operations. At the same time, he said he expects the ride-hail demand to pick up shortly in markets highly affected by the pandemic, such as Brazil and India.
When asked about market share in the UK and Latin America, Uber’s CFO Nelson Chai told analysts that Uber has maintained or improved its position in its top markets, mentioning the UK, Australia, and Brazil, among others. “Mexico is an especially competitive market, both in mobility and delivery. But the picture globally is really better than it has been in the past four years,” said Chai.
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Acquisitions are important asset for Uber’s resumption
Labor issues also pressure the ride-hailing business. The $600 million UK charge is a sign of the costs the company could face if it were to provide similar benefits to U.S. drivers, a measure it is pushing for with U.S. regulators to avoid even costlier regulation that would turn gig workers into employees.
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It is the number of drivers and food-delivery workers reported by Uber during its first quarter od 2021, the majority of whom work in the United States.
Uber‘s first-quarter results come on the heels of the company’s announcement last month that March had been the best month in the company’s nearly 12-year history, with its mobility business reporting the most bookings since the start of the pandemic and delivery demand outstripping driver supply.
The recovery is mainly driven by Uber‘s North American business, where higher COVID-19 vaccination rates and a loosening of government restrictions see many people return to pre-pandemic activities. Nevertheless, Uber‘s CEO Dara Khosrowshahi told analysts that recent acquisitions on both operations (delivery and ride-hail) are going to be key to put Uber on the path of strong growth again in the next quarter.
Recently, Uber has expanded its offerings through acquisitions of U.S.-based delivery service Postmates and alcohol marketplace Drizly and Chilean grocery delivery service Cornershop – the latter being a crucial asset for Uber’s escalation in Latin America. “Cornershop is going to be the unquestioned leader in grocery delivery in Latin America,” Uber’s CEO told analysts.
With the acquisition of Cornershop completed in January of this year, the company has already started to expand the grocery delivery service in Chile, Mexico, and Brazil.
Excluding the $600 million charge, Uber reported $3.5 billion revenue in the first quarter, ahead of an average analyst estimate for $3.29 billion, according to Refinitiv data.