Uber's Bold Strategy is... Working

January 17, 2024

"Jack of all trades, master of none" - a phrase often used to caution against overreach, but Uber is actively defying this warning. The company, once synonymous with ride-sharing, has ambitiously ventured into the broader logistics and delivery sectors.

This move sets it starkly apart from Lyft, which continues to concentrate solely on passenger transport.

Uber and Lyft: Diverging Paths
LikeFolio data sheds light on the growing divide between Uber and Lyft, who increasingly appear to be operating in different universes.

Uber's web traffic has grown by 6% year-over-year, while Lyft has seen a 22% decline.

Even more telling is the customer sentiment score, where Uber leads by 3 points.

These figures represent Uber's successful bid to engage customers beyond its original ride-sharing service.

Not to mention UBER is actually profitable while LYFT is not.

Being profitable before the dream of self-driving is huge. And its stock price agrees.

Market Response

The market has responded favorably to Uber's expansionist approach. 

Over the past year, Uber's shares have climbed an impressive 116%, in stark contrast to Lyft's 12% decline. 

This disparity speaks volumes about investor confidence in Uber's potential to dominate multiple sectors within logistics and delivery.

Financials: A Mixed Bag with Bright Spots

Uber's recent financial performance presents a mixed picture. While missing some financial benchmarks, the company reported a robust 21% increase in gross bookings year-over-year, totaling $35.3 billion in Q3. Leadership also noted continued acceleration on this front as consumers continue to spend on services instead of things. 

Expanding Delivery Services

Currently Uber’s mobility service growth leads its delivery growth (+31% YoY to +18% YoY).

But the company is working to improve this. 

Uber's foray into grocery and alcohol delivery is a strategic move to broaden its service offerings. 

The expansion, including partnerships like the one with Sprouts Farmers Market and integrating alcohol delivery app Drizly into its main app, reflects Uber's aim to become a one-stop delivery solution. 

Rumors of a potential acquisition of grocery delivery service, Instacart further underscore this ambition.

Looking Ahead: Growth and Efficiency

Uber's long-term growth trajectory appears positive, despite a current lack of visible operational efficiencies, and area that LikeFolio data may not capture.

However, the consistent increase in mention buzz and engagement points to a strong future, with Uber strategically positioning itself for sustained growth and leadership in the logistics sector.

Bottom Line

Uber's shift from being a mere ride-sharing service to a versatile player in logistics and delivery is a bold strategy that handily places the company in a league of its own. And right now we are still in the early innings.

Near-term, we’re watching to see how consumer demand fares over the next few weeks ahead of the company’s next earnings event. The bar is certainly high.

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