Uber reported on Thursday (May 7) that Uber Eats bookings and revenues soared more than 50 percent during the first quarter – a tasty morsel amid generally unappetizing results that saw the coronavirus slam the company’s flagship Uber Rides business.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats and prepare us for any recovery scenario,” Uber CEO Dara Khosrowshahi said in releasing first-quarter results, which included a nearly $3 billion headline loss. “Along with the surge in food delivery, we are encouraged by the early signs we are seeing in markets that are beginning to open back up.”
Uber said that Uber Eats – its program to deliver takeout meals from restaurants to consumers – saw revenues soar 53 percent to $819 million from just $536 million in the same period last year.
Uber Freight, the company’s service for connecting shippers with customers, booked big gains as well. That division’s revenues shot up 57 percent to $199 million from only $127 million a year earlier.
The two divisions’ improvements partly offset weakness in Uber’s main Rides operation. Gross bookings there fell 5 percent to $10.9 billion from $11.4 billion a year earlier. Uber Rides’ revenues likewise managed to only gain 2 percent to $2.47 billion from $2.42 billion a year ago.
Such weak performance proved far too much for Uber Eats and Uber Freight to completely make up for. While Uber reported that total first-quarter revenue rose 14.3 percent year over year to $3.54 billion, the company’s net loss soared 190 percent to $2.936 billion ($2.26 per share) from $1.012 billion ($1.70 a share) a year earlier.
That’s Uber’s biggest loss in three quarters, and far worse than the consensus 88 cents a share of red ink that analysts had expected. Still, after initially falling 3 percent on the news, Uber shares were up some 9 percent to $33.72 shortly after 5 p.m. ET in after-hours trading.
Uber executives put the best face possible on the big loss, pointing out that the company has some $8.2 billion of cash and cash equivalents on hand. “Our ample liquidity provides us with substantial flexibility to navigate the current crisis, but we are being proactive and taking actions to emerge stronger and more focused as a company,” noted Chief Financial Officer Nelson Chai.
For instance, he pointed out that the company announced this week that it is pulling its weak-performing Uber Eats service in eight countries, the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine. Executives also transferred Uber Eats operations in the United Arab Emirates to a subsidiary named Careem.
Uber also announced some 3,700 layoffs on Wednesday (May 6) ahead of the earnings report.