Uber Q3- Gross Bookings Down

In the midst of election madness last week, Uber reported their latest set of numbers. As expected, societal changes due to Covid have hit their mobility business hard - working from home and less travel means lower demand for a taxi service. In this last quarter, Uber's gross bookings were down 50% when compared to the year before. This is an improvement from the 73% drop reported in the previous quarter.

Covid might have negatively impacted the mobility business, but is has been a massive tailwind for the food delivery division which saw revenues increase by 135%! A division not known to South African's is Uber Freight. The business allows you to hire the services of an 18-wheeler for a long haul delivery. The Uber Freight division saw revenues of $290m, an increase of 30%.

Overall, group revenues were down 20% for the quarter, to $3.1 billion, translating into a $1.1 billion loss for the period or a loss per share of 62c. Compared to analysts expectations, revenue was a miss, but the loss was smaller than expected. On the earnings call, management said that they are encouraged by the rebound speed of their mobility business. The company expects to be EBITDA profitable by the end of 2021.

For as long as Uber continues to make losses, the share price will be volatile. Once the dust settles in the delivery industry and there are only 2 or 3 key players servicing an increasing customer base, these companies should be very profitable. You are buying Uber now for the prospect of them being an entrenched player, in an industry that will be core to how society functions in the coming decades.