You’re not the only one having a roller coaster of a week. On Tuesday, California voters handed San Francisco-based Uber a big ticket victory, agreeing that the gig-worker-contingent company needn’t offer its food delivery and ride hail drivers employee protections. It’s a decision that will save Uber millions, and sent its stock soaring by 15 percent, the highest jump it’s seen since well before the company announced its acquisition of SF-based competitor Postmates for $2.65 billion. But on Thursday, Uber announced that it lost $1.09 billion last quarter, even as its Uber Eats offering grew by a staggering 190 percent.
According to Uber’s third-quarter earnings report, which dropped after the stock market closed on November 5, Uber Eats had $8.55 billion in “gross bookings” last quarter, which shakes out to $1.14 billion in adjusted net revenue. (Adjusted net revenue, MSNBC explains, “measures revenue minus driver incentives, driver referral payments, and the cost of reimbursing drivers for Covid 19 protection equipment.) That’s a massive leap for the food delivery arm of the business, growth likely spurred as Americans sheltered in place during the pandemic.
The pandemic is also responsible for the company’s 52 percent drop in its ride hail business, which boasted $5.91 billion in gross revenues and $1.37 billion in ANR. That’s an aspect of the company that’s already bouncing back, Uber CEO Dara Khosrowshahi said during the company’s earnings call Thursday, with upticks in 11 of its top 15 markets across the U.S.
Of course, this poses the question of if Uber’s rising growth is an ascending rocket or a see-saw. Logic suggests that as the company’s ride hail business will continue to recover as more and more people leave the house — many of them dining at restaurants with indoor and outdoor seating. As that happens, one might project, food deliveries will start to drop, stymieing its food delivery gains.
That brings us to the next question: how will Uber’s eventual ownership of Postmates help stave off those losses? The deal is still under scrutiny by antitrust officials, and isn’t expected to close until mid-2021. Postmates, too, has seen its fortunes grow in the pandemic, but even then, its gains remained a fraction of Uber Eats’, generating only $160.8 million at its highest-ever point, the second quarter of 2020. If, as even Khosrowshahi suggests, the national lockdown is over and diners are again leaving their homes, Uber’s best food delivery days might be behind it — and for a company that, even after 11 years, still loses billions and billions of dollars a year, one must wonder how much further in the hole its investors will allow it to fall.