Shelter-in-place has been a windfall for Uber Eats, but the rideshare giant has still managed to lose $5.8 billion thus far in 2020.
The election day passage of California’s Prop. 22 will ensure that ride-hailing app Uber will continue to pay its drivers the most meager amounts possible. This still seems to offer little hope that Uber will not remain one of Silicon Valley’s most prolifically unprofitable money losers. Now that Uber is in the food delivery game with Uber Eats, Eater SF took note of the company’s third quarter earnings call Thursday.
The good news for the company, as Eater SF reports, is that Uber Eats’ revenue is up a very impressive 190% compared to last year. The extremely Uber news is that overall, the company still lost $5.8 billion thus far in 2020.
The two figures do not completely correlate, but they are comparable. The 190% increase in the Uber Eats revenue is compared to the third quarter of last year. The $5.8 billion in losses covers the period of January through October 2020, the pandemic period where the company has laid off thousands of employees.
Uber has enjoyed a spike in food deliveries during shelter-in-place for obvious reasons, just as its ridehail orders have plummeted since March for the same obvious reasons. Eater SF calls this a possible “see-saw,” that is to say, our endless stuck-at-home status is driving the Eats business up while simultaneously keeping the ridesharing down. An increase in one of Uber's verticals could correspond with falling revenue in another.
Uber did claim on the call that rideshare appears to be recovering, with business supposedly up in 11 of their main U.S. cities. And it may not be unrelated that Uber employees will begin returning to the office starting November 13, according to CNet.
But if the lifting of restaurant restrictions, and the reemergence of leaving the house activities, combine to drive the app-based food delivery sector down, then Uber’s $2.65 billion Postmates acquisition (expected to close early next year) may be rather ill-timed. Neither company has ever been profitable, and the shelter-in-place period may well have represented delivery apps’ best shot at profitability.
Even though the pandemic effects have been a roller coaster for Uber’s finances, a $5.8 billion loss in the first nine months of 2020 puts them pace to lose $8 billion for the year, or basically the same amount they lost in 2019.
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