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It was a tale of two business units impacted by the pandemic for Uber on Tuesday when the company released its fourth-quarter earnings.
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The good news its delivery business was booming -- up 130% in the quarter -- as millions still stuck at home sought deliveries for everything from avocados to aspirin. However, its ride-hailing unit -- down 47% -- is still trying to set a pace on the road to recovery like so many businesses.
"While 2020 certainly tested our resilience, it also dramatically accelerated our capabilities in local commerce, with our Delivery business more than doubling over the year to a nearly $44 billion annual bookings run-rate in December,” Uber CEO Dara Khosrowshahi said in the earnings release. “With two global businesses stitched together by world-class tech and increasingly valuable membership programs, we are more focused than ever on making people’s lives a little bit easier—helping them go wherever they want and get whatever they need.”
The delivery business pulled in $10.1 billion compared to $6.78 billion for ride-hailing. Shares were down nearly 4% in after-hours trading.
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Gross bookings for Uber's delivery segment grew 18% quarter-over-quarter, up 128% year-over-year in Europe, the Middle East and Africa, up 142% year-over-year in the U.S. and Canada, up 130% year-over-year in Latin America, and up 79% year-over-year in the Asia Pacific Region.
The Delivery segment posted an adjusted loss of $145 million for the quarter, improving by $38 million quarter-over-quarter and $316 million year-over-year. Its loss margin improved to 1.4% of gross bookings, compared to 2.1% in the third quarter and 10.5% a year ago.
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Meanwhile, Uber's total mobility trips for the fourth quarter grew 22% to 1.44 billion. Uber for Business' gross bookings grew roughly 45% quarter-over-quarter, with the majority dervied from non-business travel products such as delivery offerings and guest products. The divison's products grew over 360%t due to strong holiday demand for meal programs, vouchers and gift cards, adding several large customers including Microsoft.
Khosrowshahi reiterated several times during his call with analysts Tuesday that he was “optimistic” the company’s ride-sharing business would “start growing” again, but expressed concerns about Uber not having "enough drivers to meet the demand we are going to have.” In 2020, Uber paid out over $22 billion to drivers and delivery workers.
The former Expedia CEO also believes opportunity will come as Uber expands working with other modes of transport. Last year, Uber acquired the United Kingdom-based Autocab, a tech company that connects riders with local taxi operators. Khosrowshahi believes that once commuting and travel return to previous levels taxis will be looking to tap into demand and Uber can benefit.
Uber's overall monthly active platform consumers grew 19% quarter-over-quarter to 93 million. On average, monthly active consumers spent over $60 monthly across more than five transactions on Uber's platform.
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Uber's net losses amounted to $6.77 billion, a 20% improvement from its $8.51 billion loss in 2019. The company's adjusted loss was $454 million.
Chief Financial Officer Nelson Chai said the company remains "well on track to achieving our profitability goals in 2021,” citing the company closing of its acquisition of food delivery platform Postmates on December 1, which Uber said "adds a strong brand and loyal customer base, complementary geographies, over 100K partnered restaurants, over $4 billion of run-rate Gross Bookings, and a large and growing non-food merchandise Delivery as a Service (“DaaS”) offering." Delivery as a Service represented 18% of Postmates’ December orders, with notable partnerships including Walmart, Apple, and 7-Eleven.
Memberships for Uber Pass, Eats Pass and Postmates Unlimited have surpassed 5 million, with membership programs now live in 16 countries. In addition, American Express Green, Gold, Platinum & Centurion cardmembers have access to 12 months of complimentary Eats Pass membership.
Active partnered restaurants on Uber Eats grew by over 75% year-over-year, exceeding 600,000, with notable additions including Union Square Hospitality Group, Chicken Salad Chick, Which Which, Pret a Manger, La Madeleine Country French Cafe, Wings Etc, Ben & Jerry's, Cinepolis, Fresh Hospitality, and Barberitos in the United States. Uber is also partnering Papa John’s in Canada, Chipotle in the U.K. and Alain Ducasse in France.
Uber has also entered into an agreement to acquire online alcohol marketplace Drizly for approximately $1.1 billion in stock and cash. The acquisition is expected to close within the first half of 2021, subject to regulatory approval and customary closing conditions.
Drizly could boost future gross bookings for grocery and non-food delivery, which in the fourth quarter exceeded a $1.5 billion annualized run-rate. Another recent acquisition could help in the area as well.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 63.18 | +3.57 | +5.99% |
Uber recently completed the acquisition of grocery delivery startup Cornershop, which will help expand its grocery delivery business in Mexico. New partnerships include Morton Williams in the U.S., H&M and Rexall Pharmacy Group in Canada, Muffato and Raiasil in Brazil, Lawson, Francfranc and Seiyu in Japan, PX Mart in Taiwan and Sainsbury’s and McColls in the UK.
The company also noted its divestments of its ATG, Elevate, and JUMP businesses, as well as a sale of approximately $207 million worth of its shares in Didi, a Chinese ride-hailing company.
It has also entered into an agreement to sell an additional $293 million of its shares, which is expected to occur in the first quarter of 2021 subject to certain closing conditions. The aggregate shares sold by Uber represent 8% of its total as of December 31.
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