The recovery of the mobility business of Uber has been led by Asia, excluding India, said the ride-hailing giant’s chief executive officer Dara Khosrowshahi.
“Our mobility business, I would describe as a tale of 10,000 cities. Our mobility recovery is clearly dependent on the public health situation in any given area. Asia, excluding India, is in the recovery lead,” said Khosrowshahi during an earnings call on Thursday. “We’ve seen gross bookings of Hong Kong and New Zealand at times exceed pre-Covid highs. European trends have also been encouraging,” he said.
Uber posted revenue of $2.2 billion, declining 29 per cent year-over-year in the second quarter of 2020. The net loss was $1.8 billion as Covid-19 pandemic continues to pound the transportation industry. Mobility revenue declined 67 per cent year-over-year.
Khosrowshahi said the company is adding auto-rickshaws and motorbikes since it expects many riders in emerging markets to shift from public minibuses towards these lower-cost options.
However, the revenue at Uber Eats doubled to $1.2 billion, driven by a huge demand for food delivery as people continue to stay home. The delivery revenue grew 103 per cent year-over-year.
“The Covid-19 crisis has moved food delivery from luxury to utility,” said Khosrowshahi. “And as we add more use cases, our service will move from a utility to daily need,” he said.
He said the company is ramping up its subscription efforts, including nationwide allotments of Eats Pass, which combines free food and grocery delivery; and eventually, Uber Pass, which combines both Rides and Eats benefits in one monthly package.
All of these activities have resulted in new customer acquisition, monthly active eaters, orders per eater, basket size and eater
retention, all being up year-on-year and quarter-on-quarter.
Uber said the unit economics in delivery in India is improving as showcased by its investment in food delivery firm Zomato.In January, Uber announced that it had sold the India business of Uber Eats to Zomato for a 9.99 per cent stake in the Gurugram-based company. Uber sold its Indian food delivery business to Zomato for $206 million.
In July, Zomato said its revenue for the financial year 2020 (FY20) grew 105 per cent to $394 million, while loss rose about 6 per cent to $293 million. In its annual report, Zomato said Covid-19 had accelerated the company’s journey to profitability, in spite of initial hiccups.
Uber said it witnessed a $154 million gain on the sale of Uber Eats India operations to Zomato in the first quarter of 2020.
“Even in a market like India today, the unit economics are improving as we see through our investment in Zomato,” said Uber chief financial officer Nelson Chai during the earnings call.
Using its existing network, Uber is moving quickly into new delivery as a service offering, which it sees as a very high-potential opportunity.
“We piloted partnerships delivering home goods, pet supplies and pharmacy items,” said Khosrowshahi.
In other novel uses of its networks, the firm’s Uber Connect option lets consumers send small packages to friends and family via UberX drivers, a huge hit with Latin America with three million trips globally since early June. Last month, following promising launches in Europe and Australia, Uber expanded grocery to the U.S. this time in partnership with Cornershop.
“Consumers are quickly becoming accustomed to the magic of having anything delivered to their door in half an hour, much like the magic of having a car show up in a few minutes,” said Khosrowshahi. “This is an opportunity that will be many times larger than even we expected and one that Uber is uniquely positioned to lead.”