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UberEats India devours firm's global numbers

Uber Eats 1200
Uber has projected higher operating losses of 2,197 crore in UberEats for the five month period - August to December 2019.
Bengaluru: UberEats' India business has dragged down the food delivery arm's average net revenue by 0.4%, CFO Nelson Chai said on a conference call with analysts after Uber's quarterly earnings.

"Without India, it (ANR) would have been 11.1%. Now, it is 10.7%. So, India drag impact is 0.4%," he said.

Uber's total revenue rose nearly 30% to $3.81 billion, while net loss widened to $1.16 billion in the quarter ended September 30, the company said in a statement.

According to regulatory disclosures made in India, Uber has projected negative revenue of 762.5 crore in its India food delivery business for the five months ending December 2019. Uber has projected that its food delivery business in India will be profitable by 2026, according to a valuation report prepared by KPMG affiliate BSR.

Uber has projected higher operating losses of 2,197 crore in UberEats for the five month period - August to December 2019. This loss is also higher than what it forecast for the same period for its core ride hailing business, losses for which stood at 1,645 crore, according to the report. UberEats' India business competes with larger rivals Zomato and Swiggy.

In its last quarter earnings call, Uber chief executive Dara Khosrowshahi said the food delivery market in India continued to be competitive, and admitted to being the number three player in the space, in a market dominated by Swiggy and Zomato. Swiggy and Zomato also continue to aggressively burn close to $30-$40 million monthly on discounting, logistics and restaurant acquisitions. Yet, there is no clear market leader in the space. Uber's food ordering business earns lower margins than its core ride-hailing business. ET had reported earlier that Uber has halved its annual cash allocation to its food-delivery business in India to $90-$120 million.

This came a year after the San-Francisco headquartered cab aggregator earmarked its highest budget globally to India to scale up its food business. It's India rival Ola, too, had pulled its focus away from its food-delivery business, Foodpanda, and will instead sell private brands on its own platform and externally as well.

Separately Uber has allocated its Netherlands-based entity Uber BV shares worth $360 million in Uber India Systems for the transfer of rides contacts and rides data, as well as eats contracts and eats data to the India domiciled entity, regulatory filings show. This "non cash" transaction comes at a time when Uber restructured and moved its entire India business, which partially operated from Netherlands - Uber BV, to its India domiciled Uber India Systems.
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