Uber Failed to Meet Expectations in the Third Quarter

Uber Technologies Inc., commonly known as Uber, is an American company based in San Fransisco, that operates around the world. It is worth mentioning that, Uber reported the third quarter revenue that missed expectations. According to the company’s CEO Dara Khosrowshahi, there are early signs its core ride-hailing business would fully recover from the coronavirus pandemic. Let’s have a look at the results to learn more about the company.

Interestingly, when it comes to losses, the company lost 62 cents per share vs. 65 cents share expected. It is with mentioning that, revenue in the third quarter failed to meet expectations. Importantly, overall Uber lost $1.09 billion on a GAAP basis during the quarter, an improvement from a year ago, when their losses amounted to $1.16 billion. 

Let’s have a look, how Uber’s largest business segments performed in the third quarter. Importantly, mobility adjusted net revenue, including Uber’s core Rides business, fell 52% year-over-year to $1.37 billion for the third quarter. 

However, Delivery adjusted net revenue, including from Uber Eats, grew 190% year-over-year to $1.14 billion. As a reminder, adjusted net revenue is a non-GAAP measurement that measures revenue minus driver incentives, driver referral payments, as well as the cost of reimbursing drivers for coronavirus protection equipment.

Uber and coronavirus pandemic

The San Fransisco-based company reiterated guidance that Uber expects to be profitable on an EBITDA basis by the end of 2021. 

It is not surprising that the company was struggling to cope with problems during the last eight months. As mentioned earlier, there were early signs that the company’s core mobility business would fully recover. Importantly, the company improved its position in 11 of the top 15 markets in the United States. For example, the company improved its position in New York City, Atlanta, and Chicago in the third quarter. 

It is worth noting that, the company’s proposed ballot measure, Proposition 22 won voters’ support in California elections. As a reminder,  Proposition 22 allows Uber as well as its peers and competitors Lyft, Instacart, and DoorDash, to treat their drivers and couriers as independent contractors, not employees. Thus, Uber will avoid the costs of providing a full state of benefits and protections for drivers. 

The company continues to expand its services by acquiring the competitors of Uber Eats. Interestingly, the company agreed to buy out the courier service Postmates, once seen as a competitor to Uber Eats. Moreover, the San Fransisco-based company acquired Cornershop, a grocery delivery business.