Sections

ideals
Business Essentials for Professionals

Uber’s Ride Haling Takes Pandemic Hit But Revenue Of Food Delivery Doubles


08/08/2020


Uber’s Ride Haling Takes Pandemic Hit But Revenue Of Food Delivery Doubles
While the trips for ride hailing company Uber increased by 5 per cent in the second quarter from its lows in April, the company’s gross bookings were 75 per cent lower than the same period a year ago. This is the major revenues for the company in the past.
 
However there was an increase of in orders for Uber’s food-delivery service by almost twice the number year on year during the second quarter. But there was only a marginal increment for ride-hailing trips of the company during the quarter compared to the record lows of the company.
 
Despite the current challenge being faced by the company primarily because of the novel coronavirus pandemic, the company was confident of ticking to its previously announced target of becoming profitable by the end of 2021. That would be driven by stringent cost-cutting measures and strengthening of its balance sheet. During the second quarter, Uber reported an adjusted loss in earnings before interest, taxes, depreciation and amortization of $837 million.
 
However the demand for company’s ride hailing services grew considerably during the second quarter in the markets of Hong Kong and New Zealand with demands crossing the levels seen before the pandemic. There as a slight improvement in ride bookings and trips for the company,  with a reduction in drop at of 35 per cent year on year during the quarter, in the markets of Germany, France and Spain.
 
During the quarter, the number of active platform users for the company in all of the 69 countries that the company currently operates in dropped by almost 50 per cent year on year, dropping to 55 million from 99 million a year ago. 
 
There was a 29 per cent year on year drop in the revenues of the company for the second-quarter which however beat estimates of analysts predicted at $2.18 billion, according to IBES data from Refinitiv.
 
The bright spot for Uber was its food delivery service Uber Eats. During the second quarter, revenue generated by the food delivery business of the company doubled year an year to $1.2 billion primarily because of increased demand for home delivery of food as people got stuck at home because of stay at home orders imposed in various countries to prevent the spread of the pandemic. Last month, the company expanded its delivery reach through the acquisition of Postmates Inc in a deal worth $2.65 billion as the company set eyes on expanding into the business of supplying everyday goods.
 
Uber's ride-hailing segment remained battered by the coronavirus crisis, with revenue from the United States and Canada, its largest combined market, declining $1.25 billion. Nevertheless, ride-hailing was the only segment generating an adjusted EBITDA profit, of $50 million.
 
(Source:wwww.wionnews.com)