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Tag: food delivery

  • Rakuten Doubles Tokyo Autonomous Delivery Fleet to 10 Robots

    Rakuten Doubles Tokyo Autonomous Delivery Fleet to 10 Robots

    Rakuten Group has expanded its autonomous sidewalk delivery fleet in eastern Tokyo, targeting 24,000 households across the Harumi, Tsukishima, and Kachidoki districts. The Japanese group is doubling its deployment of US-built Avride delivery robots to 10 units after launching the commercial run in November 2024.

    The service connects more than 90 drop-off points to local merchants, including Starbucks, FamilyMart, Yoshinoya, and Supermarket Bunkado. Each cart carries one order per trip inside a 54-liter cargo hold, twice the volume of earlier testing units. They run for up to 12 hours on a 3.5-hour charge, navigating at speeds capped by Japanese law at 6 kilometers per hour.

    Sidewalk Hardware and Route Rules

    Avride builds the hardware with light detection and ranging sensors alongside ultrasonic arrays, allowing navigation at night and in rainfall up to 20 millimeters per hour. Operations pause during heavier storms, snow, or high winds. Japanese transport regulations require off-site human overseers to monitor the machines remotely, though operators do not need to walk alongside them on the pavement.

    Integrating different property access points and door locks remains the main operational hurdle for sidewalk robotics in dense Asian cities. Rakuten uses custom unlocking instructions tailored to individual apartment complexes to let buyers retrieve parcels from the cargo bay.

    Expanding Beyond Food Orders

    Japan’s food delivery sector reached 800 billion yen ($5.41 billion) in 2024, but acute courier shortages and tightening overtime limits on drivers are forcing platform operators to automate ground transport. While automated carts still handle a sliver of Rakuten’s total volume, the group is setting up the software routing engine to support mixed fleets across commercial hubs.

    Rakuten plans to test the 10-robot fleet on business-to-business shipments and prescription pharmaceuticals once domestic retail operations stabilize across the initial three Tokyo neighborhoods.

  • South Korea Retail Sales Rose 6.4% in July on Summer Spending

    South Korea Retail Sales Rose 6.4% in July on Summer Spending

    South Korea’s major retailers increased combined sales by 6.4 percent year-on-year in July. Demand for vacation gear, imported fashion, and food delivery services drove the rise.

    Internet platforms handled the bulk of that growth. They captured 60.8 percent of total retail revenue during the month, according to data from the Ministry of Trade, Industry and Energy.

    Department Stores and Convenience Chains Expand

    Brick-and-mortar turnover climbed 3.2 percent from a year earlier. Both department stores and convenience chains extended their unbroken run of year-on-year growth to 13 consecutive months.

    Department stores posted the sharpest gains offline, with sales jumping 17.9 percent. Demand rose across every major category. Imported apparel, summer travel gear, and cooling appliances led the expansion.

    Convenience stores generated a 1.1 percent sales increase over the same period. Foot traffic slipped. Higher spending per transaction kept overall takings positive.

    Online Channels Take Larger Revenue Share

    Digital platforms posted an 8.5 percent revenue increase compared with July last year. Food delivery orders, packaged groceries, and home appliances recorded the fastest category gains across web storefronts.

    Consumer habits in the country continue to split. Digital channels dominate everyday replenishment, while physical stores rely on experiential shopping and premium apparel to draw spending.

    Trade ministry officials will publish the August retail index next month. That report will show whether back-to-school shopping and late-summer promotions sustained the sales momentum.

  • Swiggy’s Losses Double Amid Marketing Surge And Delivery Challenges

    Swiggy’s Losses Double Amid Marketing Surge And Delivery Challenges

    Swiggy, one of India’s leading online food delivery platforms, has reported a near-doubling of its quarterly loss compared to the same period last year. This increase in losses is attributed to a significant rise in marketing expenditures aimed at securing a larger customer base in an intensely competitive market.

    Growth Strategies and Challenges

    In its decade-long presence in the market, Swiggy has maintained its position among the top contenders in the food delivery industry through continuous investments in marketing, platform enhancements, and customer loyalty programs. The company is also directing funds into its rapid retail division, Instamart, as part of efforts to expand its network of stores, fortify logistics, and provide enticing discounts.

    However, the company’s operations have been affected by issues relating to a shortage of delivery partners, a situation exacerbated by unanticipated monsoon rains in India. Concurrently, the need for sustained, high levels of marketing investments has been necessitated by persistent competition.

    The competition is not just limited to the food delivery sector. The rapid retail sector in India is becoming increasingly crowded, with competitors such as the Tata-backed BigBasket and Amazon vying for market share. Furthermore, Swiggy faces additional competition in the food delivery space from the ride-hailing platform, Rapido, where Swiggy holds a 12 per cent stake.

    Financial Performance

    Despite these challenges, Swiggy’s total revenue for the quarter ending June 30 increased by 54 per cent, amounting to 49.61 billion rupees (US$566.2 million). However, consolidated expenses also saw a significant jump, up by around 60 per cent to 62.44 billion rupees, with sales promotions more than doubling. Consequently, the company’s consolidated net loss for the quarter rose to 11.97 billion rupees, a significant increase from the 6.11 billion rupees loss reported in the same period last year.

    Expansion and Order Value

    Despite these financial setbacks, Swiggy continued to expand its geographical reach, adding three new cities to its network to stand at a total of 127. The company also added 41 stores and increased the size of existing ones. The gross order value from its food delivery segment climbed by approximately 19 per cent to 80.86 billion rupees in the June quarter. Meanwhile, Instamart’s gross order value saw a massive surge of nearly 108 per cent, reaching 56.55 billion rupees.

    Questions & Answers

    What factors contributed to Swiggy’s increased quarterly losses?
    Increased marketing spend to attract customers in a fiercely competitive market, along with the expansion of its quick-commerce arm, Instamart, significantly contributed to Swiggy’s increased losses.

    What challenges did the company face recently?
    Swiggy experienced a shortage of delivery partners due to earlier than anticipated monsoons in India. Additionally, the company faced stiff competition, necessitating high marketing investments.

    Did Swiggy see any growth despite these challenges?
    Yes, Swiggy reported a 54 per cent surge in total revenue for the quarter ending June 30. The company also expanded its services to three new cities, added 41 stores, and saw a substantial rise in gross order value from both its food delivery segment and Instamart.

  • China’s Food Delivery Wars: Alibaba and Rivals Feel the Profit Pinch

    China’s Food Delivery Wars: Alibaba and Rivals Feel the Profit Pinch

    In the midst of a fierce food delivery war, China’s major players—Alibaba Group, Meituan, and JD.com—are locked in a high-stakes competition to capture consumer spending in the world’s largest economy. The stakes have just risen as JD.com recently amplified the battle, reporting an explosive surge in both orders and new users, propelled by substantial subsidies.

    This past weekend, excitement reached new levels. Many consumers reported delightful surprises in their deliveries—free bubble tea and coffee were offered to users over consecutive weekends, contributing to an enthusiastic uptick in orders. This unexpected beverage boon has not only sparked consumer enthusiasm but also sent shares of Hong Kong-listed bubble tea brands soaring to new heights, making investors perk up faster than a barista brewing their morning espresso.

    As these platforms race to dominate the market, the question remains: what will be the next thrilling tactic in a game that seems to be brewing stronger every day?

    Questions & Answers

    What are the three main platforms involved in China’s food delivery war?
    The primary competitors are Alibaba Group, Meituan, and JD.com, each striving to capture consumer spending in China.

    What recent event contributed to a spike in user engagement for these platforms?
    Over two recent weekends, users received free bubble tea and coffee with their deliveries, which significantly boosted both orders and user registrations.

    How have investors reacted to the rise in coffee and bubble tea giveaways?
    Investors took notice, as shares of Hong Kong-listed bubble tea brands experienced a sharp increase, reflecting the excitement generated by these promotions.

  • Alibaba Unites Food Delivery and Travel Divisions to Propel ‘Instant Retail’ Initiative Forward

    Alibaba Unites Food Delivery and Travel Divisions to Propel ‘Instant Retail’ Initiative Forward

    In a significant shift within its operational strategy, Alibaba Group has announced plans to merge its food delivery service Ele.me and online travel platform Fliggy into its China e-commerce business segment. This development, revealed by CEO Eddie Wu in an internal letter to employees on Monday, reflects a rollback of the company’s previously ambitious restructuring initiatives, signaling a keen focus on enhancing the efficiency of order fulfillment.

    A Strategic Upgrade in Focus

    “This marks a strategic upgrade as we transition from an e-commerce platform to a broader consumer platform,” Wu articulated, as reported by Nikkei Asia. This pivot is aligned with the e-commerce giant’s commitment to streamline operations and adapt to rapidly changing market dynamics. The integration of Ele.me and Fliggy into the core e-commerce unit is expected to foster a more cohesive approach to consumer services, tapping into the growing demand for integrated shopping experiences among Chinese consumers.

    Wu’s announcement comes as Alibaba navigates a competitive landscape marked by shifting consumer behaviors and economic uncertainties. The decision to streamline operations comes not just as an internal strategy, but as a necessary move to remain agile in a sector that demands quick adaptations and seamless customer service.

    The Bigger Picture of Consumer Demand

    As the company looks to redefine its role in the marketplace, the consolidation of these platforms underscores Alibaba’s recognition of the evolving consumer landscape. In recent years, the appetite for quick delivery and comprehensive service options has surged, making it essential for the e-commerce behemoth to integrate more responsive solutions into its repertoire.

    In a retail universe where customer expectations are as high as a skyscraper and competition often feels like a sprint, Alibaba is positioning itself to not just keep pace, but to set the tempo.

    Questions & Answers

    What prompted Alibaba to merge Ele.me and Fliggy?
    The decision stems from a strategic shift aimed at enhancing efficiency and better responding to the changing dynamics of consumer demand in the e-commerce market.

    How does this merger align with Alibaba’s broader goals?
    This merger reflects Alibaba’s transition from a traditional e-commerce platform to a more comprehensive consumer service provider, reinforcing its commitment to seamless customer experiences.

    What impact could this merger have on consumers?
    Consumers can expect a more integrated service offering from Alibaba, with improved order fulfillment and a potentially wider range of services available at their fingertips.

  • Vietnamese delivery app on the brink of turning profitable

    Vietnamese delivery app on the brink of turning profitable

    Delivery startup Loship is confident it will make profits this year, something most of its competitors have yet to achieve.

    Nguyen Hoang Trung, CEO of one of only two delivery startups in Vietnam said that Loship suffers “very little” loss.

    Last year its revenues increased by 500% thanks to business optimization with 250,000 locations and more than five million customers.

    It expects to turn profitable this year.

    Losing money is the norm in the food delivery and ride-hailing industry.

    As of 2021, Grab Vietnam had chalked up cumulative losses of VND4.365 trillion (US$186 million). Gojek is also VND4 trillion in the red.

    Both incur huge selling expenses running ino trillions of dong.

    Trung said all other apps are also affected by Regarding the increase in gasoline price, this but “honestly not too much”. When the Russia-Ukraine war took place, it was a nightmare in the beginning. But so far, the gas price has not changed too much and it’s even cheaper than at the beginning of the crisis. It shows that gas price will continue to increase and then decrease. In the short term, this affects the income of shippers, but not in the long term.

    He said gasoline price increases have a knock-on effect on all prices, including restaurants’. But when they go down, other prices do not follow suit and remain high, and this causes people to gradually stop ordering food, which affects shippers, he said.

    Over time many shippers decide to stop working for apps, as is happening in places like China, Europe, the U.S., and India.

    In 2021 and 2022 Loship spent a lot of money on acquiring new customers, and so marketing costs accounted for over 60% of its expenses. This led to some differences of Loship from others in the market that weren’t “properly recognized” by the customers. One of these differences is that Loship offers free delivery within a certain distance.

    Trung and his team wondered if Loship would be any different from its competitors if they continued to do this. Existing users are still Loship users but they can also be using other apps. Realizing the problem, Loship began to cut its promotions, reducing costs.

    Trung explained: “No matter how big you are, there is always a limit. Money doesn’t fall from the sky.

    “Each company has a long-term strategy for the amount of money it has. The better their strategy, the more money in in their account. Then, even during difficult times they can afford to be generous to their customers.”

    To achieve the goal of breaking even this year Loship is prioritizing cash flows. Last year the company cut 50% of its payroll. Besides, from the second quarter all marketing activities essential ones were frozen.

    Trung thinks the reason Loship is approaching breakeven is that it has found the balance between customers, shippers and restaurant partners, something he admitted was not easy to achieve. Any increase in price could drive customers into the arms of another platform, and any cut in payments to shippers could cause them to take out their frustration on customers, he pointed out.

    In the next three years food delivery and supermarkets would still be the markets that have great competition. Apps would also offer additional services like their own e-wallets to increase convenience for users, he said.

    But he made it clear Loship has no intention of entering the fintech industry since that would require a big investment. Instead, they want to exploit the number of restaurant partners for raw materials supply.

    A recent report by iPOS, a platform that provides sales, operations, and human resource solutions for more than 100,000 restaurants and coffee shops, shows that the food delivery market in Vietnam grew three-fold since the Covid outbreak to VND29.9 trillion last year.

    More than 12 million people ordered food delivery through online platforms, with the number growing annually at 17.5%.

    But the market is dominated by foreign enterprises with 58% of consumers choosing to order on ShopeeFood. It was followed by GrabFood, Baemin and Gojek.

    The only two homegrown players in the market, Loship and beFood, accounted for around 7%. The market still has a lot of room for competition when most of the big applications on the market recorded a reduction in percentage of users.

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  • Singapore-based food-ordering platform Gobble ceases operations

    Singapore-based food-ordering platform Gobble ceases operations

    Social media-based food-ordering platform Gobble has shut down in Singapore after more than 18 months of operations.

    The company’s founders announced the closure on their LinkedIn page. One of them, Ashwin Purushottam, cited the company’s inability to raise additional funding to fuel its growth as the main cause of the company’s failure.

    “Running a group-buying marketplace in a space such as food ordering, which has seen an onslaught of disappointing IPOs, set an unfortunate precedent for our next fundraise,” said Purushottam.

    The platform reached US$350,000 in annual gross merchandise value with revenue surging by 47 per cent month-on-month. However, despite the high volume of sales, the profit margins were too low for the company to continue running.

    “As we continue to grow and develop Gobble, we realised that relying solely on a B2C model wasn’t sustainable for us,” said fellow co-founder Domenico Tan. “We failed to show a quick enough path to positive cash flow. With our current funding, we knew we would not be able to generate enough revenue just from Singapore to raise our Series A.”

    The food pick-up app for discount group orders was founded by the two entrepreneurs in 2021. The company subsequently bagged $1.3 million in a seed round led by Beenext and Flash Ventures.

    According to a report released by Grab and Euromonitor International, the Southeast Asian online food delivery gross merchandise value is estimated to grow from US$9 billion in 2020 to $28 billion in 2025.

  • Airasia halts food delivery service in Singapore

    Airasia halts food delivery service in Singapore

    Airasia’s food delivery ambitions seem to have halted in Singapore. The brand’s web-based platform informed users that addresses within Singapore were outside its coverage area. This was the case for 12 consecutive days from 20 December 2022 to 31 December 2022.

    Airasia’s food app was launched in Singapore in February 2021. As part of the launch in the Singapore market, airasia food was on the hunt for F&B operators to sign up as merchants, offering a special sign-on rate as low as 8% for the month of March.

    Compared to other food delivery platforms, such as FoodPanda, Deliveroo and GrabFood, airasia’s food delivery service initially charged eateries a lower commission rate of 15% without any hidden fees or charges to the F&B operators. This allows for eateries to keep their profits favorable.

    When the app initially launched in Singapore, an airasia spokesperson said, “Our strength in technology and logistics infrastructure, plus deep insights to our customers’ preferences will allow us to remain the preferred choice for Singapore customers. We are not distracted by competitive forces and will continue to stay focused on bettering our delivery speed to under 30 minutes, product and service offerings.”

    The food delivery service was part of airasia foray into digital services and superapp ambitions. In November 2022, airasia’s parent company, Capital A enhanced the brand’s Super App by introducing airasia chat, games and the newly launched airasia gifts – allowing the community of airasia members to connect, play and share.

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  • Thai food delivery app Lineman Wongnai bags $265 million

    Thai food delivery app Lineman Wongnai bags $265 million

    hai food delivery app Lineman Wongnai on Monday said it has raised US$265 million from Singapore’s GIC, PTT Oil and Retail Business, Taiwan Mobile, and other investors.

    The startup said the investment round puts the company’s value at over US$1 billion, making it a ‘unicorn’ firm.

    The announcement comes as competition heats up among food delivery apps in Thailand, including the homegrown Robinhood, which is backed by Thai lender Siam Commercial Bank Pcl, and AirAsia Superapp.

    The capital injection will help Lineman grow from “a local Thai start-up to a regional tech platform,” said chief financial officer, In Young Chung.

    He added the company plans to have an initial public offer (IPO) but did not provide a timeframe.

    The company was formed last year after Lineman and restaurant aggregator Wongnai formed a joint venture and raised US$110 million from BRV Capital.

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  • Uber Launches Robot Food Delivery In California

    Uber Launches Robot Food Delivery In California

    Uber Technologies on Monday said it launched pilot food delivery services with autonomous vehicles in two California cities, and said it was adding electric vehicle charging stations into its global driver app.

    The announcements are part of Uber’s annual product event where the ride-hail and food delivery company showcases the latest updates to its app.

    Uber announced one food delivery service using autonomous cars, and a separate pilot using sidewalk robots. Both services are available to Uber Eats users in Santa Monica and West Hollywood in California, and consumers will have the ability to opt out of the programs.

    The autonomous car pilot is in collaboration with Motional, the self-driving joint venture of Hyundai Motor Co and Aptiv PLC, and was initially announced in December. It launched on Monday, Uber and Motional said.

    Uber said the sidewalk robots are provided by Serve Robotics, a spin-off of delivery company Postmates, which Uber acquired in 2020.

    The vehicles in both services are actively monitored by human operators, Uber said, adding that “it will be some time before this technology is operated at scale.”

    Self-driving companies have repeatedly pushed out timelines to provide truly driverless trips at scale, with only a few limited fully autonomous programs available across the U.S.

    Uber on Monday also said it was launching a map of electric vehicle charging stations in its driver app in the U.S. this summer, and later worldwide, in an effort to promote drivers switching to a battery-powered vehicle.

    Uber, which aims to have only electric vehicles on its platform in the United States, Canada and Europe by 2030, said charging was one of drivers’ biggest obstacles to switching to EVs.

    The company also said it was launching an option this summer to rent party and coach buses, and passenger vans through its U.S. app in collaboration with rental service US Coachways.

  • Zomato boosts Blinkit delivery stake for US$568 million

    Zomato boosts Blinkit delivery stake for US$568 million

    The top brass of food delivery app Zomato are set to come together on the 17th of June to pen to paper and make the acquisition of Indian based start-up company Blinkit officially complete.

    The deal is set to be of a stock exchange type at a ratio of 1:10 where Blinkit will get a share for every 10 shares Zomato gets from Blinkit. Initially, the value of Blinkit was set at around $ 700 million USD but with this type of deal, that value set to have gone down to an extent.

    Blinkit is a company that Zomato has been eyeing for a while now as they are a business that focuses on instant deliveries. The company was founded almost a decade ago back in 2013 and its head office is situated in Gurgaon, Haryana. Blinkit is a mobile application that can be downloaded on the play store where its users can order groceries, and other items and essentials through the app from the comfort of their own home. The company even guarantees a 10 minutes delivery time.

    A 10-minute delivery time has become the new fad in the delivery business in the country with both Blinkit and Zepto basing their entire business model and marketing strategy on this feature. Zomato has also been piloting their 10-minute delivery feature called Zomato Instant but their Delhi based pilot was not a success. Naturally, delivering food within 10 minutes is much harder than groceries which is why the acquisition of Blinkit is going to be a major boost for them as it will give them crucial help in breaking the 10 minutes barrier which they have been struggling to over the past few months.

    Zomato is one of the most popular food delivery apps in India along with Swiggy and the duo have been battling to be most popular food delivery apps for years now. Swiggy however diversified their features and opened their ‘Instamart’ where they sell fruits, vegetables and groceries while Zomato stuck with just partnering up with restaurants and delivering food. But now, Zomato has also dipped their feet into the grocery delivering business with this new acquisition and it will be interesting to see how it will play out.

    It seems like this deal will be helping all parties involved as Zomato can improve their 10-minute delivery service with the help of Blinkit’s logistics while Blinkit can increase their operations with the help of Zomato.

  • Uber Eats leaving Hong Kong at the end of 2021

    Uber Eats leaving Hong Kong at the end of 2021

    Food delivery giant Uber Eats revealed on Tuesday it would wind down its Hong Kong operations by year’s end after seeing slower-than-expected growth.

    “Uber Eats has unfortunately not grown as expected in Hong Kong,” the company said in response to a Post inquiry. “This decision has been made independent of the global pandemic, and is in line with our broader strategy on Uber Eats.”

    One of the city’s three main food delivery platforms – along with Deliveroo and Foodpanda – Uber Eats launched in Hong Kong in October 2016 and has seen a sharp rise in orders throughout the coronavirus pandemic over the past two years.

    “After five years of partnering with restaurants and delivery people in Hong Kong, we have made the difficult decision to discontinue Uber Eats in Hong Kong on December 31, 2021,” the company said earlier in the day.

    Uber Eats said its priority was now to support its employees, restaurant partners, delivery people, and customers as it moved towards shutting down, but added it was “more committed than ever” to growing its ride-hailing services in the city.

    “We will keep investing and serve more riders and drivers in coming years by bringing the very best technology to Hong Kong,” the company, which operates in a legal grey area in the city, said.

    The spokesman said the company would continue providing support to customers and partners until the end of January.

    Uber Eats employs 5,000 delivery workers, some of whom signed up after losing their jobs amid the pandemic, and its service covers 16 of the city’s 18 districts.

    In July, Uber Eats launched a campaign in support of the small and medium-sized restaurants that use its platform, snagging celebrity endorsements from singers Alfred Hui and Joyce Cheng.

    In recent months, with almost no local transmission of the coronavirus, Hong Kong’s restaurant industry, along with other businesses such as hotels, have seen signs of recovery, and bookings are healthy for the year-end holiday season.

    Although social-distancing restrictions limiting the number of people permitted at venues such as bars and restaurants remain in place, about a third of the city’s 16,000 restaurants can now seat up to six per table, as long as diners have received at least one dose of a vaccine and use the government’s “Leave Home Safe” risk-exposure app.

    The latest data from SevenRooms, a booking platform used at more than 350 of Hong Kong’s high-end restaurants, showed people were dining out and spending more this year when compared with two years ago, before the pandemic hit.

    Earlier this month, Foodpanda couriers, upset with a cut to their delivery fees and other issues, went on strike for two days.

    The strike ended after the company agreed to make changes to its mobile app and fee calculation system as well as look into other demands

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  • Gojek Vietnam GM reveals ambitions after launch of car service

    Gojek Vietnam GM reveals ambitions after launch of car service

    Launched amid the Covid-19 pandemic, GoCar is one of two big products Gojek planned to introduce this year to complete its golden triangle in Vietnam, including transportation, food delivery and payment.

    Phung Tuan Duc, Gojek Vietnam GM shared stories behind the launch of car service during the Nguy – Co talk show hosted by Thai Van Linh.

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  • Uber CEO Makes Deliveries For Uber Eats In San Francisco

    Uber CEO Makes Deliveries For Uber Eats In San Francisco

    Uber CEO, Dara Khosrowshahi, delivered food to people’s doorstep in San Francisco for those ordering from Uber Eats. He completed 10 trips and managed to rake in $98.91. He tweeted about this from his personal handle saying “Spent a few hours delivering for @UberEats. 1. SF is an absolutely beautiful town. 2. Restaurant workers were incredibly nice, every time. 3. It was busy!! – 3:24 delivering out of 3:30 online. 4. I’m hungry – time to order some”

    While it was great to see the CEO of the company getting into the groove and making deliveries, Twitter absolutely erupted calling this a ‘PR stunt’

    User Dan Skelley who has been the most vociferous of the lot in calling it a PR stunt questioned the stats presented. He said “Let’s discuss ur BOGUS stat page. U did 10 orders ON A BIKE in 3 hrs 24 min. First, U can’t get 45pts for 10 trips. Max is 30. U imply 1ride/18 min incl travel time to the pickup with no waiting. Short travel time EVERY time to perfect dropoff EVERY time + only 6 min of downtime”$

    Twitterati Brice Sopher too spoke out about the experience saying “Wow what a surprising conclusion that you, the ceo of Uber, had a great experience working this job. Now try doing it as your only source of income.

    There were many such replies questioning this exercise by the Uber CEO, suffice to say, that though it was all well-intentioned, there’s no wondering how social media will react to it.

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  • Uber Reduces Losses On Food Delivery Expansion, Modest Uptick In Ride Bookings

    Uber Reduces Losses On Food Delivery Expansion, Modest Uptick In Ride Bookings

    Uber Technologies Inc on Wednesday posted a narrower loss as its ride-hail and delivery businesses rebounded slightly from pandemic lows, and the company said it was well on track to reach its goal of achieving an adjusted profit by year-end.

    Uber said customers in cities’ outer boroughs and suburbs had returned to its rides platform during the quarter.

    Nearly complete recoveries in markets including Brazil and Australia point to leisure travel to restaurants and cultural events bouncing back quickly once the pandemic ends, with business travel returning more slowly, as many employees continue to work from home.

    Shares fell 3% in after-hours trading after gaining around 6% during the day. Shares had risen after smaller ride-hail rival Lyft Inc said on Tuesday it might become profitable during the third quarter, three months ahead of a previous goal, thanks to a rebound and cost cuts.

    Uber reported a loss on an adjusted basis before interest, taxes, depreciation and amortization of $454 million, significantly less than analysts’ average expectations for a $514 million loss, according to Refinitiv data.

    Uber cut costs throughout 2020, including reducing staff by nearly 30% from the beginning of the year. A focus on its core rides and food delivery business and divestments of ancillary units will allow Uber to emerge from the pandemic a slimmer company.

    Adjusted EBITDA, which excludes the cost of the company’s extensive stock-based compensation and other potentially significant items, is the profitability metric Uber uses.

    Uber reported $3.17 billion in total revenue in the months from October through December.

    Fourth-quarter mobility revenue, largely comprised of rides, declined by 52% from last year, but at $1.47 billion was up 8% on a quarterly basis despite new lockdown measures in the United States, Europe and the Middle East.

    The company said it could not predict the quarter in which ride-hail volumes might return to pre-pandemic levels. Airport travel, which made up 15% of gross bookings before the pandemic, will take longer to return than leisure and business trips, Uber said.

    It expected first-quarter adjusted EBITDA to be flat or down compared with the fourth quarter.

    Orders at Uber’s food delivery platform, Uber Eats, further grew during the fourth quarter, as many countries and U.S. states issued new lockdown orders, closing restaurants and prompting many people to order in.

    Delivery revenue more than tripled from last year and at around $1.36 billion, grew 19% compared with the third quarter.

    Uber has expanded its footprint in the competitive space and acquired smaller food-delivery rival Postmates for $2.65 billion and alcoholic beverage delivery service Drizly for $1.1 billion.

    Both deals were largely stock-based, with the Drizly deal expected to close later this year.

    Uber also said it had further lowered costs in the fourth quarter, with total costs and expenses dropping 14% in that period.

    Following a directive by Chief Executive Dara Khosrowshahi to focus on the company’s core businesses, Uber has sold two cash-burning units.

    The company in December sold its self-driving Advanced Technologies Group (ATG) in a $4 billion equity deal at a steep drop in valuation. Khosrowshahi at the time said the deal would accelerate Uber’s profitability goal.

    The same month, Uber also handed over the keys to its air taxi business Elevate, without disclosing the terms of the deal.