Uber’s delivery business tops core ride-hailing as pandemic rocks earnings

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Uber Technologies Inc. reported second-quarter earnings Thursday.


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Uber Technologies Inc. posted another quarterly loss of more than $1 billion Thursday as the COVID-19 crisis took a toll on its core ride-hailing business, which was actually surpassed by Uber’s food-delivery business.

Uber
UBER,
+4.54%
reported a second-quarter loss of $1.78 billion, or $1.02 a share, on revenue of $2.24 billion, compared with a record loss of $4.72 a share on revenue of $3.17 billion in the year-ago quarter. Revenue fell 29%, showing the dramatic effects of the COVID-19 pandemic on a once fast-growing business.

The company’s results fell short of Wall Street’s expectations on the bottom line, but revenue actually held up better than analysts projected. Analysts surveyed by FactSet on average had expected Uber to post a loss of 81 cents a share, or nearly $1.4 billion, on revenue of $2.1 billion.

Uber’s ride-hailing business has taken a huge hit. Gross bookings fell 35% to $10.2 billion, but bookings within the “mobility” segment fell much harder at 73% and ride-hailing revenue plunged 67% from last year to $790 million.

Meanwhile, Uber Eats bookings more than doubled from last year, saving the quarter as Uber prepares to dramatically increase the size of that business with the acquisition of PostMates. Uber Eats brought in more revenue than ride-hailing for the first time, rising 103% to $1.21 billion. The company and analysts had expected increased demand in its food delivery business to help offset the plunge in rides, as would-be riders spent the bulk of the second quarter sheltering in place but got more used to ordering takeout.

We are fortunate to have both a global footprint and such a natural hedge across our two core segments: as some people stay closer to home, more people are ordering from Uber Eats than ever before ,” Chief Executive Dara Khosrowshahi said in a statement.

Shares of Uber
UBER,
+4.54%
dropped more than 4% in after-hours trading after ending the regular session up 4.6% at $34.72. The stock is up 16% this year.

Uber released results at the same time its lawyers were defending against a lawsuit brought against the company and rival Lyft by California Attorney General Xavier Becerra and the city attorneys of San Francisco, Los Angeles and San Diego over the companies’ noncompliance with a state law that would classify their drivers as employees instead of independent contractors. A preliminary injunction hearing, in which the plaintiffs were seeking immediate reclassification of the drivers before a trial, was set for Thursday afternoon at San Francisco Superior Court.



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