Uber sees rides recovering from Covid-19 lows, banks on food-delivery biz

Uber reported it had seen encouraging signs in markets hit by the pandemic and posted a 14% rise in revenue for the first quarter, supported by a jump in food-delivery orders at its Uber Eats business.

Uber Technologies Inc's ride service bookings slowly recovered in recent weeks as the company expects a coronavirus-related slowdown will delay the goal of becoming profitable by a matter of quarters, not years, Chief Executive Dara Khosrowshahi said on Thursday.

He spoke after Uber reported it had seen encouraging signs in markets hit by the pandemic and posted a 14% rise in revenue for the first quarter, supported by a jump in food-delivery orders at its Uber Eats business.

Khosrowshahi said stringent cost cutting, to the tune of more than $1 billion (808 million pounds) in 2020, would ensure the company stayed on track. Uber on Wednesday said it would lay off 3,700 full-time employees, or roughly 17% of its headcount.

The company, which makes the bulk of its revenue through ride-hailing, said trip requests had dropped 80% globally in April, but were slowly recovering. In the United States, Uber's most important market, ride requests were up 12% last week from their lowest point in April.

In large cities in Georgia and Texas, U.S. states that have reopened parts of their economy in recent weeks, trips were up around 45% from their low point in April, Uber said.

Global lockdown orders aimed at curbing the spread of the virus were a silver lining for Uber's loss-making food delivery unit, with many new customers and restaurants signing up for the service as eateries were shuttered.

Uber recorded $3.54 billion in total revenue for the first three months of the year, roughly in line with analyst estimates, but still posted a $2.9 billion loss in the period. That included a $2.1 billion pretax writedown of the value of some of Uber's minority investments.

Uber sells its India food delivery business to Zomato in all-stock deal

The deal is applicable only in India and Uber Eats will continue to operate in Bangladesh and Sri Lanka.

Company News : Uber on Tuesday announced the sale of its food delivery business in India to Zomato in an all-stock deal.

Uber will get a 9.9 per cent stake in Zomato as part of the deal whose size has not been disclosed. The deal for Uber Eats, which operates in 41 cities, was signed at 3 am, and its customers will be shifted to the Zomato app from 7 am.

Around 245 Uber Eats employees will be affected by the deal. However, sources in Uber India say they will be in the pay rolls till March 31 and that the company is making every effort to absorb some of them and provide support to the rest in finding jobs.

The deal is applicable only in India and Uber Eats will continue to operate in Bangladesh and Sri Lanka. According to sources the deal value is around $300- 350 million.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Deepinder Goyal, CEO of Zomato.

Sources said the move is part of Uber’s strategy to be either number one or two in each of their businesses in every country they operate. In India, Uber Eats grew very quickly to take a 12 per cent share of the food delivery market. However, while India constituted for 3 per cent of the global gross booking of Uber Eats it also constituted for 25 per cent of its global EBITDA losses for the business segment. Intense competition in India’s food delivery market prevented India Uber Eats from taking either the first or second position, which are with Zomato and Swiggy.

The move to double down in India will help Uber Inc to improve the financials of Uber Eats.

Uber is concentrating on making its cab hailing business in India profitable and will expand of its network within the country from 50 cities to 200 cities this year.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success, ” said Dara Khosrowshahi, CEO of Uber.

The move is expected to push Zomato to the top slot in this space, pushing down Swiggy.

#ZomatoUninstalled, #BoycottUberEats trend after 'food is religion' tweet

Even as the incident had social media divided, the Jabalpur police sought an undertaking from the Zomato customer that he would not spread religious hatred.

Business Standard : A day after Zomato snubbed a customer who refused an order from a non-Hindu rider, #ZomatoUninstalled trended on Twitter on Thursday, with many accusing the online food delivery platform of bias. #BoycottUberEats also caught on after UberEats backed its rival’s “Food has no religion” comment.

Even as the incident had social media divided, the Jabalpur police in Madhya Pradesh sought an undertaking from the Zomato customer that he would not spread religious hatred. The controversy began on Tuesday when a Zomato customer tweeted: “Just cancelled an order on @ZomatoIN they allocated a non-Hindu rider for my food they said they can't change rider and can't refund on cancellation. I said you can't force me to take a delivery. I don't want don't refund just cancel.”

In response, the official Twitter handle of Zomato tweeted, “Food doesn’t have a religion. It is a religion.”

Zomato founder Deepinder Goyal tweeted: “We are proud of the idea of India — and the diversity of our esteemed customers and partners. We aren’t sorry to lose any business that comes in the way of our values.”

While several Twitter users came out in support of Goyal, others agreed with the customer and pulled out examples of complaints where Zomato did not take a similar stand. The tweet that began the entire issue was, however, deleted by Thursday morning.

Hashtags like #boycottzomato trended on Wednesday, #ZomatoUninstalled gathered steam on Thursday.

"Bye bye Zomato, you lost one precious customer, many more to come… Don't support one side if you can't resolve the issue. #Zomato Uninstalled,” tweeted one user. Many uninstalled UberEats’ app as well, and tweeted #BoycottUberEats for supporting Zomato.

This is not the first time religious issues have prompted users to uninstall an app. 

#BoycottAmazon had trended on Twitter in May after toilet seat covers and other items with images of Hindu gods were spotted. In 2015, Snapdeal faced #BoycottSnapdeal after its then brand ambassador Aamir Khan said he may consider moving out of India with his family.