Uber has yet to turn a profit. That isn’t surprising, and it likely won’t continue much longer. Uber has been growing in many areas and expanding to more and more cities and countries. But it appears, at least according to The New York Times, that the profitable area for Uber is actually in its food delivery service, UberEats. Despite entering the market a bit late, the report states that UberEats is profitable in 27 of the 108 cities that it is available in. And even more interesting than that, UberEats is actually outpacing regular ride-sharing in some cities, including Tokyo and Seoul.
While Uber was late to the game, it has been able to take a sizable chunk of the industry thanks to its strong presence in many cities and countries already. Seeing as Uber drivers are able to start driving for UberEats pretty easily, it meant that Uber was able to launch in a new city and have an army of drivers already available for UberEats. Compared to something like GrubHub, Eat24 or Postmates, which don’t have a ride-sharing service behind them. According to The New York Times, UberEats is also growing incredibly fast, with UberEats trips growing “by more than 24 times between March 2016 and March 2017.” This is likely partly to do with more and more restaurants joining services like UberEats, and more people realizing it exists. As Grubhub and Eat24 have also seen massive increases in the past year.
This is good news for Uber, especially since it needs to become profitable before it can go public – which it plans to do soon – the company is going to need to watch out for Amazon. With Amazon having just purchased Whole Foods, it’s clear that Amazon is about to get into the grocery delivery business. But it also means that Amazon has a slew of stores that it can start selling some of its more popular items in, and get them to consumers quicker. Which could pose a real challenge for services like UberEats, Eat24 and Postmates. Of course, it’s still the early stages of Amazon and Whole Foods, so we’ll have to wait and see how that will change over time.