World News – US – Uber reports 18% drop in revenue, but says ridesharing business picks up


Uber shares fell as much as 4% after hours Thursday, as the company reported third-quarter revenue that missed Wall Street expectations, but picked up on the company’s earnings call when the CEO said there were early signs its core ridesharing business would fully recover from the Covid 19 pandemic

Here is how the company performed against Wall Street analysts’ expectations for the period ending September 30, 2020:

Overall, Uber lost $ 1.09 billion on a GAAP basis in the quarter, an improvement over last year when their losses were $ 1.16 billion

Mobility adjusted net revenue, including Uber Rides’ core business, fell 52% year over year to $ 1.37 billion for the third quarter , while adjusted net revenue on delivery, including Uber Eats, grew 190% year-over-year to $ 1.14 billion Adjusted net revenue is a non-GAAP measure which measures income minus driver incentives, driver referral payments and the cost of reimbursing drivers for Covid 19 protective gear

The company reiterated its forecast that Uber expects to be profitable on an EBITDA basis by the end of 2021

During a conference call to discuss the results, CEO Dara Khosrowshahi said that while the past 8 months had been tough, there were early signs that the company’s core mobility business would fully recover He said Uber improved its position in 11 of the top 15 US markets during the third quarter, including New York, Chicago and Atlanta

He said Uber rides are coming back faster than other modes of transportation, including public transportation in many cities and New York taxis No-mask-no-ride policy helps company turn riders back, despite concerns of Covid 19 CEO said: “Uber comes back when cities come back If anything, Uber is a form of transportation advantageous over others « 

Shares of Uber had soared on Wednesday and continued to climb Thursday ahead of profits, after the company’s proposed voting measure, Proposition 22, gained voter support in the California election

Prop 22 enables Uber, along with its peers and competitors Lyft, Instacart, and DoorDash, to treat their drivers and couriers as independent contractors, not employees This means Uber will avoid the costs of providing a full range of driver benefits and protections, including paid sick days and other leave, unemployment insurance and health care

Instead, under California’s Proposition 22, Uber will pay qualifying drivers partial benefits, such as a minimum base wage better than the federal minimum wage, and a driver’s health insurance subsidy. , the amount of the subsidy being based on the number of hours they work

Khosrowshahi said, during the call, Uber will continue to advocate for voting measures like Prop 22 across the US

Aside from the political struggle to preserve its business model, Uber faced negative impacts from the pandemic on its core transportation business for most of 2020.However, as a variety of healthcare and transportation orders border policies restricted travel and travel, Uber users ordered more meals to be delivered through Uber Eats

With its food delivery business overtaking its core rides business in the second quarter of 2020, Uber has agreed to buy out Postmates, once considered a competitor to Uber Eats, for a deal worth of about $ 2 65 billion in July Previously, it had acquired Cornershop, a grocery delivery company, and had started making grocery deliveries in New York City last month

Khosrowshahi said that Uber Eats now has 560,000 restaurants on its platform, including around 30% of restaurants in the United States and around 15% of those in France Although he declined to guess whether Uber’s mobility or delivery business was going to be greater in the long run, he said he believed the total addressable market for deliveries, including meals and products grocery store, was at least as big as the commute market

Since its second quarter report, Uber has raised half a billion dollars in equity to fuel the growth of its logistics arm, Uber Freight This business unit, launched by Uber in 2017, has an after-money valuation of $ 3.3 billion, the company said in a statement Uber Freight recorded just $ 290 million in gross bookings in the third quarter of 2020, a 30% increase from the same period last year

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Global News – United States – Uber Reports 18% Drop in Revenue, But Says Rideshare Business Is Rebounding


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