Uber’s New Reality is that Delivery > Rides
Uber delivered mixed Q2 results, with delivery continuing to serve as a safety net while mobility recovers slower than expected.
Delivery > Rides: Uber’s delivery business has overtaken its ride-hailing division in terms of both bookings and net adjusted revenue. Eats Bookings reached $7 billion in the quarter, accelerating by 106% y/y. Meanwhile, Rides Bookings declined 73% y/y to $3 billion, compared to $12.2 billion in Q2 2019. Together, Gross Bookings declined 32% y/y to $10.2 billion, and Adjusted Net Revenue was down 31% y/y. Additionally, the number of new Eats customers grew 50% y/y in the quarter.
Delivery-as-a-service: Delivery goes beyond food. Uber recently launched a Uber Connect, a same-day delivery solution to send packages, items, and goods to others. Uber has seen early success from the non-food delivery opportunity, with 3 million trips globally since June.
Profitability picture: EBITDA loss came in at $837 million vs. $656 million in Q2 2019. Two key catalysts for profitability include rationalization leading to fewer subsidies, and long-term pricing power.
“While EBITDA losses remain high, we believe improving top-line trends combined with cost controls should enable Uber to approach its goal of breakeven EBITDA by the end of 2021.” - Raymond James analyst Aaron Kessler.
