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Uber eats its fill – Consolidation is the name of the game

Uber is quickly realizing the potential in food delivery, especially in bolstering the company's main operations. It has now made Uber eats services accessible from its main app.

The Uber eats standalone app will remain available 50% of Uber eats customers don’t use the company’s ride-hailing services Uber's food delivery business is allowing it to cover some of the losses its ride-hailing branch makes every quarter

This week, Uber officially assimilated its food delivery arm, Uber eats, and consolidated the service into its main app. 

In other words, you can order either a ride or food from the main Uber app now, but fear not, the standalone Uber eats app is not gone. 

Food delivery is where the money is at

Uber is quickly realizing that food delivery is where the big bucks are, and a way for the company to stem the bleeding. 

While profitability is still entirely out of the picture, Uber is realizing that indeed, food delivery is a very logical direction to take the company in, and a way for it to stay competitive amid fierce rivalry with counterparts such as Lyft and Didi Chuxing. After all, 50% of its Uber eats consumer base don’t use the company’s ride-hailing services, Tech Crunch (TC) notes, quoting the company’s CEO. 

“What we found is that with Rides and Eats . . . we are seeing early signals where essentially you can have very little if any cannibalization of a Ride and throw a significant amount of potential demand onto the Eats side,” Uber CEO Dara Khosrowshahi said during the earnings call, as reported by TC. 

“Really what we are looking to do is significantly increase the percentage of our MAPCs [monthly active platform consumers] that use both products [ride-hailing and Eats] and when we see customers using more than one product, their engagement with the platform more than doubles,” Khosrowshahi continued. “So not only does engagement with Uber increase, but the engagement with our individual products increases as well, so it’s kind of a win, win, win.”

By integrating eats into its main ride-hailing app, Uber will do just that. 

The Uber eats app will not be phased out, however, and will remain available. This way, the company doesn’t force-feed its ride-hailing services to its already loyal eats users and risk losing them to competitors, which is a rather smart decision on the company’s end. It would have been easy to try and funnel in all of their customers into the main app, but Uber is playing it safe – and smart. 

Profitability still nowhere in sight, but things could be worse

After releasing a bittersweet Q1 report last month, the company reported a $1 billion loss during the quarter, now as a publicly-listed company. Despite a conservative share pricing of $45, its IPO last month underperformed, well under expectations. 

In the wake of its Q1 report, however, the company did find some solace, thanks to its food delivery business. Uber eats reported an 89% increase in revenues, following heavy investment into its operations. This, coupled with an uptick in its freight business, pushed Uber Technologies Inc’s overall revenue up by 20%. 

This helped push revenue figures to meet expectations. 

Revenue of $3.1 billion matched the high end of the range Uber forecast for the quarter and the loss of $1.0 billion compared with the company’s forecast of $1.0 billion to $1.11 billion,” Reuters noted.

At its core, Uber remains a primarily ride-hailing based firm, but it is branching out into all manner of transportation streams. After all, Khosrowshahi said during the earnings call that they envision Uber as “a one-stop shop for the movement of people and powering local commerce around the world.”

While ride-hailing is not exactly profitable at this current moment in time, the company is learning to mitigate the cash bleeding until it reaches its goal of the worldwide domination of transportation. 

“Uber views Eats as a way to soak up some of the massive losses attributable to its ride-hailing business,” The Verge explains. 

After all, the company has great and endless aspirations, but achieving them will require equally-endless amounts of capital – forever in its pursuit of its own Amazon breakthrough.