Uber's CEO Dara Khosrowshahi: "The big opportunity that we already thought Eats was just got bigger"

Dara Khosrowshahi said that the conclusion of Cornershop acquisition is a key move for the business in Latin America

Uber Ceo Dara Khosrowshahi
Photo: Frederic Legrand - COMEO/Shutterstock

Uber has just released its global first-quarter results. As expected, the demand for the ride operation fell strongly (80% in April), but Uber Eats operations revealed itself as the company’s safe port during COVID-19 pandemic and beyond.

Overall, thanks to January and February mostly, Uber’s revenue grew 14% year-over-year (without the company’s COVID-19 response initiatives, the revenue’s growth would have been 18%). The gross bookings grew to $15.8 billion, up 8% year-over-year, with Rides declining 3% (to $10.87 billion) and Eats growing 54% year-over-year (to $4.68 billion), respectively, on a constant currency basis.

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“The big opportunity that we already thought Eats was just got bigger,” Uber’s CEO Dara Khosrowshahi said during the conference call with analysts this Thursday afternoon. Globally, the number of active users on Eats platform was up over 50% in the last three months, according to the executive, all of them consuming food mainly from SMBs.

“These restaurants need us and we want to show that we’re there for them. Small and medium restaurants still account for a large part of our volume and our goal going forward,” added Khosrowshahi while answering a UBS‘s analyst question.

Eats’ operation was also important for Uber’s partner drivers. Only in the U.S. and Canada, nearly 40% of the active drivers on the platform cross-dispatched to Eats in the month of April.

The crisis caused by the new coronavirus caused the company to postpone plans to achieve profitability to 2021 (the previous guideline was that this target could be reached by 2020), and to layoffs.

On Wednesday, due to lower trip volumes and our current hiring freeze, Uber announced a reduction of its customer support and recruiting teams by approximately 3,700 full-time employee roles.

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Cornershop and Latin America on the spotlight

He mentioned that the conclusion of the acquisition of the grocery delivery startup Cornershop is a key move to make Eats grow even more. The startup, headquartered in Chile, was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga, and Juan Pablo Cuevas, and now operates in Chile, México, Peru, Brazil (9 cities: São Paulo, Osasco, Barueri, Santo André, São Bernardo, São Caetano, Porto Alegre, Curitiba e Rio de Janeiro), Canada (Toronto) and, most recently, the U.S. (Miami and Dallas). The deal is still subject to regulatory approval in each of these countries.

To LABS, Cornershop’ Head of Operations in Brazil, Andressa Carrasqueira, informed that, as part of its strategy, the company plans to launch in a new Brazilian city every week.

“Once the acquisition is complete, we’ll integrate Cornershop with Eats and other Uber apps,” said the CEO, referring to Uber’s newest operations, such as Uber Connect and Uber Direct.

Uber Direct is a delivery platform for retail items; Uber Connect is a peer-to-peer package delivery service, for sending goods to family and friends. “These offerings highlight the flexibility of the Uber platform, while also providing additional earnings opportunities to drivers and delivery people,” says the company’s statement.

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The acquisition is another step for Uber in diversifying its business in one of its most important markets, Latin America. The company’s revenue in the region grew 10% between January and March, compared to the same period last year, to $497 million.

Khosrowshahi stressed that Uber will only stay in markets where Eats has a chance to be the number 1 or 2 delivery app. On Monday, consistent with the company’s long-term strategy, Uber announced a change to the geographic footprint of Uber Eats operations, discontinuing the platform in 8 countries, including the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine. The discontinued and transferred markets, according to the company, represented 1% of Eats gross bookings in Q1 2020.

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