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Uber Eats will no longer deliver for Brazilian restaurants

U.S. operations unaffected, but company continues to prioritize nonfood delivery business growth opportunities

Uber has announced it will no longer delivery from restaurants in Brazil through its Eats platform, focusing instead on growing its grocery and retail delivery businesses. (Photo: Uber)

Uber is transitioning away from restaurant delivery in Brazil as the company seeks to grow its delivery business in the country.

An Uber (NYSE: UBER) spokesperson told Modern Shipper restaurant delivery services will remain active on Uber Eats until March 7, after which time they will shut down.

“After that date, people can continue to rely on the app to find the best selection of supermarkets and wholesalers in Brazil, as well as home decor, beverages and pet supplies, among others,” the spokesperson said.

Uber’s delivery business, which includes grocery delivery startup Cornershop that Uber acquired in 2019, Uber Flash, which delivers packages, and Uber Direct, which provides retailers and small businesses with same-day delivery, saw orders triple in 2021 compared to 2020. It is available in over 100 Brazilian cities.

“The unique combination of our scale and leading technology across mobility and delivery will allow our users to go anywhere and get anything they want,” the spokesperson said, adding that Uber Eats is not disappearing as some reports had suggested, but instead would transition to focus on grocery and retail delivery.

Read: Uber stock rebounds after earnings, analysts maintain bullish outlook

Read: Uber eyes positive Q3 EBITDA, shares close up 11.5%

Uber Eats’ U.S. operations are not affected by the move.

Uber was a distant second in restaurant delivery in Brazil with just 10% of the market share, according to data from Measurable AI. iFood leads with 80% market share as of Q2 2021. The data company said that from March to July 2020, Uber Eats’ share was 25% before falling off dramatically.

In its 2021 Q3 earnings, Uber reported its first profitable quarter as a public company, reporting revenue of $4.8 billion, up 28% quarter-over-quarter and 72% year-over-year. Profit was $8 million.

Its global delivery business, though, posted a loss in the quarter even as Uber Eats became the largest source of revenue for the company. Delivery generated about $3 billion more in gross bookings than its ride business, yet posted negative adjusted earnings before interest, taxes, depreciation and amortization of $12 million.

Delivery gross bookings reached a $53 billion annual run rate in October 2021 with bookings up 9% month-over-month and 44% year-over-year.

Watch: Uber acquires Transplace

CEO Dara Khosrowshahi, speaking on the Q3 earnings call, said momentum was building in the global delivery business, with gross bookings rising 8% in September 2021 and October 2021 even as more businesses opened up.

“Today, we’re focused on addressing grocery, convenience and alcohol through our marketplace, bolstered by the addition of Cornershop and most recently, Drizly, through the Uber platform,” Khosrowshahi said. “In addition, with Uber Direct, we’re working with retailers to fulfill demand from their own channels in a white label product that uses our delivery tech.”

Khowrowshahi said he believed Uber could be the market leader in nonfood delivery outside the U.S., and inside the country, there is a large opportunity in grocery delivery with less than 5% of the overall grocery market moving to online ordering so far.

 Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]