Uber Technologies has reported a loss of $1.78 billion in its Q2 2020 earnings owing to lockdowns imposed across the world thanks to the COVID19 pandemic. This has impacted its core ride-sharing massively. Year on year, its ride-sharing business collapsed by 73 per cent compared to Q2 2019. On the bright side, with people staying in more, its UberEats, food delivery business, grew massively. It primarily was the driver of revenue for Uber in the quarter with it growing by 113 per cent posting $6.96 billion in revenues in the quarter.
This also meant for the first time Uber's ride-sharing business was eclipsed by one of its newer ventures. In this case, Uber Eats posted more than double the revenue when compared to the core ride-sharing business of $3.05 billion.
"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," CEO Dara Khosrowshahi said in a statement following the report. We've essentially built a second Uber in under three years," Khosrowshahi proclaimed.
Uber's core business was protected in the first quarter as it ended on March 31. At the time, including in India, lockdowns weren't as pervasive.
Uber's CEO, though noted that its business was on the road to recovery in India. "Our mobility recovery is clearly dependent on the public health situation in any given area," said CEO Dara Khosrowshahi on the earnings call. "Asia and India are in recovery," he added. He even said that markets like New Zealand and Hong Kong are also recovering, but its home market of the US remains a challenge.
The other problem for Uber is that the food delivery business has thinner margins than even ride-sharing. Both businesses work only on the scale and in markets as India Uber has also sold its UberEats business to food delivery biggie Zomato.