Food-delivery business doubles while rides demand plummet

Because of lockdown, the amount of people ordering food delivery has skyrocketed. ...

Demand for food-delivery service has more than doubled in the second quarter as many users remained largely homebound, while demand for ride-hailing trips was only marginally recovering from pandemic rock-bottom, according to Uber Technologies Inc.

The multinational ride-hailing company said that despite those larger challenges it is sticking to its goal of being profitable on an adjusted basis before the end of 2021 thanks to stringent cost-cutting measures and a strong balance sheet.

Uber recorded an adjusted loss in earnings before interest, taxes, depreciation and amortization of $837 million in the second quarter.

ide-hailing trips, in the past responsible for nearly two-thirds of Uber’s revenue, increased 5*rcentage points from their low in April, but gross bookings remained down 75% from last year.

On Thursday, Uber posted a $1.8 billion net loss in the months from April to June, including charges related to the laying off of 23% of its global workforce during a period when infections of the novel coronavirus continued to spread in the United States, Uber’s largest market.

The number of active platform users nearly halved year-over-year, from 99 million to 55 million.

Uber’s second-quarter revenue fell 29% to $2.24 billion from the year prior, beating analysts’ average estimate of $2.18 billion, according to IBES data from Refinitiv.

Revenue at Uber Eats doubled to $1.2 billion, boosted by greater demand for delivery as Americans largely continue to stay home. Uber last month expanded its delivery reach by announcing the acquisition of Postmates Inc for $2.65 billion to expand the business of supplying everyday goods.

While Uber’s ride-hailing segment remained battered by the coronavirus crisis, it was the only segment generating an adjusted EBITDA profit, of $50 million.

Uber Eats, whose gross bookings more than doubled, continued its loss-making streak but narrowed losses, recording a $232 adjusted EBITDA loss in the second quarter.

Reported by Tina Bellon and Akanksha Rana

Sourced Reuters

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