Uber Q2 - Eats Doing Well

Uber had second quarter results out last night, and they were weak. Weaker than a weak cup of tea. They racked up a loss of $1.02 per share, worse than the estimate of $0.86. Revenues were a bit better, $2.24 billion where the street had only expected $2.18 billion.

All this was to be expected, as no-one could really use their ride-hailing services during the Covid-19 lockdowns. UberEats was operational and saw some good growth, but that business is smaller and has worse margins than the taxi service.

As I pointed out a month ago, a modest number of Vestact clients own Uber shares in New York portfolios. I got very excited when they listed on the NYSE in May 2019 and we bought a fair bundle of shares at listing day at $42 per share. I am a fairly significant shareholder myself.

During the Covid-19 washout the stock price fell to $21. Urgh! Since stay-at-home orders eased, ride traffic has picked up a bit - people are still anxious about getting into a shared vehicle. In America right now, there is apparently a shortage of cars for sale. Once the virus subsides, people will go back to the Uber model. It's cheaper to have someone else own the wheels.

In other news, this week Uber bought UK-based Autocab, which sells software to the taxi and private hire vehicle industry. Autocab operates in 20 countries globally at this stage, and has its HQ in Manchester.

I know that some people think I'm insane and that Uber will never make any money, and is a dog with fleas. Why own it? Just wait I say! They had gross bookings across their operations (the total value of the mobility services provided to customers) of over $10 billion. In a while they will be back to their prior target gross booking level of about $25 billion per quarter. I back CEO Dara Khosrowshahi to turn a profit from that throughput in short order.

After the results release, Uber's share price is down a bit, trading at around $33.50 per share. Current shareholders should hang in there. You'll have to trust me on this one.