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Uber’s CEO thinks Eats is a secret weapon in the ride-hailing wars


Uber’s CEO thinks Eats is a secret weapon in the ride-hailing wars

Uber is experimenting with increasing the cross-promotion of its Eats food delivery service and its ride-hailing offering inside the company’s app, CEO Dara Khosrowshahi said Thursday.
Khosrowshahi said he feels comfortable trying this after finding out that when customers use more than one of the company’s products, their engagement with Uber “more than doubles” overall. He also thinks it could help cement the company’s dominance in certain emerging markets.

“Really what we’re looking to do is significantly increase the percentage of our MAPCs [monthly active platform consumers] that use both products,” said Khosrowshahi, on his first call with investors since Uber went public earlier this May. “Suffice it to say we are starting to experiment in ways in which we can upsell our ride [hailing] customers to Eats deals in a way that, you know, to be plain spoken, isn’t annoying, and in a way that is beneficial to our riders.”
He told investors that the company’s ride-hailing service is already a “very strong audience creator” for the Uber Eats business. But he also said that 50 percent of Eats customers don’t use Uber for ride-hailing; the food delivery service is bringing in new customers. “These are customers that then we can upsell into the rides business,” Khosrowshahi said.

Uber is only in the “very, very early” stages of “exploring the many, many ways in which [the company’s] rides business can help continue to build [its] Eats business, and vice versa,” Khosrowshahi said. But, he added, Uber has seen “very, very encouraging” early returns.

Uber’s losses have only accelerated this year, as the company confirmed Thursday that it lost $1 billion in the first quarter of 2019, after taking a $3 billion bath in 2018. Increasing the cross-promotion of the Eats and standard Uber services is one way the company hopes to staunch the bleeding.

Khosrowshahi views food delivery as a massive new opportunity for the company’s business, even though it faces intense competition in certain markets. In India, for example, Uber Eats is up against multiple well-funded startups. But in Latin America, Khosrowshahi said Uber will be able to “uniquely capitalize on the synergies between the two offerings as we’re the only company [there] that offers both rides and Eats.”

“It is a huge category, and there are some folks that believe that the food category can be larger than the rides category,” he said. Despite the many challenges it faces, Eats generated $536 million in revenue for Uber during the first quarter of 2019. That’s nearly double the revenue it generated in the first quarter of 2018. Meanwhile, Uber’s ride-hailing revenue only went up 9 percent year-over-year.

Uber’s goal is to become the “one-stop shop for the movement of people and powering local commerce around the world,” Khosrowshahi said. Since he took over as CEO in 2017, Khosrowshahi has added shared scooters, bikes, public transportation schedules (and in Denver, even the ability to buy tickets) to Uber’s app. That’s in addition to the dedicated self-driving and flying car divisions he inherited from his predecessor, Uber co-founder Travis Kalanick.

“You just have the whole transportation ecosystem on one app, all your information fully integrated, with a loyalty program beneath it. We think that’s a very, very powerful product,” he said. “But it will take time for all this to come together.”

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