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Forks in the road

4 Aug 2021 By Gina Chon

Uber Technologies’ driver hasn’t arrived at the desired destination yet. The $80 billion ride-hailing company has invested in more than 20 businesses and sold nearly as many since 2017, when Dara Khosrowshahi took over as chief executive, according to Refinitiv data. More focused rival Lyft reached profit by one measure in the second quarter. Uber is still en route.

Uber said on Wednesday that its second-quarter revenue increased by 105% year-over-year to $3.9 billion. The company’s adjusted EBITDA measure of profitability showed a $509 million shortfall, though it said it’s on track to have a gain on that front by the fourth quarter.

On a similar metric, which excludes things like stock-based compensation, Lyft is speeding ahead. Uber’s $18 billion U.S. rival said on Tuesday that it turned profitable in adjusted EBITDA terms in the most recent period, sooner than anticipated. The company benefited from revenue that more than doubled in the second quarter to $765 million compared with a year earlier.

The M&A-savvy Khosrowshahi is doing his best to reshape the more global and diversified Uber. He cut losses in food delivery and ride hailing overseas by selling businesses to Zomato in India and Yandex in Russia. Last year, he offloaded the company’s scooter and bike business to Lime, in which Uber is an investor.

Uber has also been an active shopper. Last month, it agreed to buy logistics software firm Transplace for $2.3 billion to boost its trucking business. It’s also expanding delivery, acquiring smaller Uber Eats rival Postmates for $2.7 billion in 2020. In February, Uber swallowed alcohol-order app Drizly for $1.1 billion.

The on and off ramps have yet to bring investors home. Uber’s enterprise value-to-revenue multiple, based on Refinitiv estimates for 2021 sales, is in the same ballpark as Lyft’s at just over 5 times but way short of, say, DoorDash, the No. 1 U.S. food-delivery app, which trades at more than 12 times revenue.

Uber’s range of businesses gives it more ways to offset downturns. And dealmaking has put it on the road toward being the go-to company for delivering people and things. But only its ride-hailing unit is profitable on an adjusted EBITDA basis, and it’s still small in areas like trucking. For his four years of work, Khosrowshahi is not yet earning a five-star result.


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