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· Posted on
May 18, 2021

Uber Eats has smashed expectations for another quarter - so you can stay lazy forever

Uber Eats surpassed its quarterly expectations but why did it do so well?

What's the key learning?

  • Uber unintentioanlly hedged, meaning it reduced its risks.
  • A hedge consists of taking an offsetting or opposition position. A bit like a bet 'each way' for safety.
  • Uber's rideshare and food delivery businesses naturally hedged against each other during COVID (and actually complemented each other extremely well).
  • Uber's ride sharing business did not perform well during worldwide lockdowns. But Uber's food delivery business performs extremely well when we can't leave the house

HOW DID UBER MANAGE THIS BALANCING ACT?

Chequered history: Uber has had an interesting history since launching around 11 years ago. First it was the fast-growing Sillicon Valley tech darling. Then it was the fast-growing Sillicon valley tech devil (with a bad reputation for misogyny).

What's profit?: Uber is now a public company is allergic to profits. In fact, Uber lost $140 million in the first 3 months of this year.

UberEats carrying the business: Uber’s food delivery service improved revenue by 166% over the quarter, while Uber's ride sharing business declined 38%.

So, what's the key learning?

Uber hedged. A 'hedge' is an investment that is made with the intention of reducing risk. And usually, a hedge consists of taking an offsetting or opposition position. A bit like a bet 'each way.'

Uber's rideshare and food delivery businesses naturally hedged against each other during COVID (and actually complemented each other extremely well).

Uber's businesses worked together like a team. The ride sharing business did not perform well during worldwide lockdowns. But Uber's food delivery business performs extremely well when we can't leave the house.

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