Uber quarterly sales fall for first time as pandemic guts rides
Uber Technologies Inc. generated more revenue from delivering food than transporting people for the first time last quarter, but it failed to offset a steep and prolonged decline in ridership brought on by the coronavirus pandemic.
Sales fell 29% in the second quarter to $2.24 billion, ending a decade of unchecked growth. The loss in the quarter also widened, but Uber maintained Thursday that it will achieve its goal of turning an adjusted profit by the end of next year. Food delivery has become a central part of that strategy, even more so after the $2.65 billion deal to buy Postmates Inc. Shares sank as much as 5% in extended trading after the financial report.
The sharp drop in ridership in the second quarter mirrors the overall contraction of the travel industry. With many retailers, schools and workplaces closed or at reduced capacity, transportation use will probably remain low for the foreseeable future, and Uber could be "permanently impaired," according to Daniel Morgan, a portfolio manager at Synovus Trust Co. "Continued high Covid-19 case levels will likely weigh on ride-sharing demand throughout 2020 and into 2021," he wrote in a note to clients.
Uber even pared back its global food delivery operation by exiting more than a half-dozen markets to make room for expansion in more developed ones. After bidding unsuccessfully for Grubhub Inc., Uber agreed to buy Postmates last month in a bid to add more U.S. customers.
https://www.aljazeera.com/ajimpact/uber-quarterly-sales-fall-time-pandemic-guts-rides-200806203859184.html
