Last week Uber released their Q1 results. For very obvious reasons, this is a company heavily impacted by a pandemic. Bookings for the quarter came in at $15.8bn, ahead of expectations of $15.7bn. This was because of a massive increase in Uber Eats (up 54%) while rides declined 3%. Here is the breakdown of their quarter.
Monthly Average Users increased 11% to 103 million. Margins increased as they left eight unprofitable markets for Eats. Fortunately, South Africa was not one of those markets.
Rides in April (this current quarter) dropped 80%. Ouch! But in the first week of May rides globally picked up 12%.
We see this period as an opportunity to streamline its business (close non-profitable markets) and expand on its Eats business where they are doing well. Mobility will be impacted for a while to come but keeping vehicle's sterilised and screening drivers is manageable. A lot more than the airlines. Besides, people may prefer an Uber ride to a train or a bus?
Alternatives like their scooter rental business, which keeps the rider separate from others and outdoors, should also thrive. They recently merged their scooter business with Lime whilst adding a further $170m to the venture. Speaking of cash, they are sitting on $11bn in cash, which they deem more than enough to weather this storm.
It won't be a smooth ride but we see Uber as a good recovery bet.