The Uber Eats’ Top-Two Strategy
This is Uber Eats strategy - become one of the top two players for food delivery in a city—or get out. The aggressive playbook was unveiled as Uber was revealing the scale of its losses in its last quarterly earnings. It came short of analyst expectations for "gross bookings"—revenue before paying expenses for drivers and others—while the total loss for the unit grew 67% on-year to $316 million (Fortune).
Overall, Uber lost $1.16 billion for the quarter on $3.8 billion in revenue, exceeding Wall Street’s already low expectations for the company. However, the miss on gross bookings for Eats and rides coupled with smaller-than-expected growth in overall monthly active users spooked investors, sending Uber’s stock down more than 5% to $29.49 in after-hours trading.
But on Monday’s earnings call, Uber executives assured investors that they have a plan for Uber Eats. That plan, couched in financial speak, is to selectively retreat if the company can't be among the top two in food delivery.
Yes, even Uber Eats is not a sure banker. Where does Uber go from here?