Uber CEO Sees ‘Huge Market’ In Delivery Beyond Food

Uber and its newly acquired Postmates have found rapid growth in home delivery of groceries — and potential for much more growth — during the COVID-19 crisis, Uber CEO Dara Khosrowshahi told CNBC this morning.

Interviewed on the network’s “Squawk on the Street” program, Khosrowshahi said the growth has come even as traditional ridership is down.

“What we’re seeing during this crisis is that the Eats business is growing at unprecedented rates,” he said, putting the overall annual revenue run rate of the Uber Eats business at about $30 billion — roughly the total Uber annual revenue run rate of three years ago.

The grocery delivery business is profitable in two of its top five markets, Khosrowshahi said, without specifying which ones. But overall, he said, “the Eats business, the delivery business, isn’t making money right now, but it’s because we’re investing behind this unbelievable right of growth.”

Khosrowshahi said the variety of items delivered will expand as the company further taps into what he described a “huge market.”

“Eats and Postmates are not just going to be about delivering food, but they’re going to be about delivering grocery, convenience, pharmacy as well. We think there’s a huge market — anything that you want from your local business or your local market, sent to your home inside of 30 minutes. That’s an enormous business and you’re seeing signs now — very early signs — of a huge market ahead of us.”

Grubhub, the delivery services that specializes on taking restaurant meals to its users, also saw a major spikein business during the quarter that ended June 30, 2020. Executives at the company said there are indications the uptick may be permanent.

Uber on Thursday (Aug. 6) reported a net loss of $1.78 billion, or $1.02 per share, on revenue of $2.2 billion for the quarter ended June 30, 2010, compared with a loss of $1.1 billion, or $4.72 a share, on revenue of $3.2 billion for the quarter ended June 30, 2019.