UberEats rolled out its first quarterly report as a public company and stated a 4 per cent drop in the commissions earned on a year on year basis. This drop was mainly due to the massive investments it had to make in its India unit to stand strong against its two giant rivals, Zomato and Swiggy. It had to offer incentives to drivers and restaurants apart from offering big discounts to its users in India.
The drop wasn’t reported by its India unit alone though, as the entire global business of UberEats had to take a hit. The incentives given to consumers, drivers, and restaurants reduced UberEats’ take rate to 8 per cent, which stood at 12 per cent a year ago. Uber, including its ride hailing sector, reported an overall increase of 20 per cent in their revenue to reach USD 3.1 billion for the first quarter of 2019. ET had earlier reported that UberEats tried to sell its India unit to rivals Swiggy. However, the deal did not materialize and fell off in the last stages. The pressure on UberEats is reportedly affecting Uber’s overall margins as well. The company said that the margins dropped 4 per cent year on year to 18 per cent only of the overall booking value.
Talking of food delivery in India, it is reported that Swiggy and Zomato at soon slash the heavy discounts they offer to maintain their revenues. Swiggy is facing protest from its riders in Kochi, which is expected to hit the company further and give them one more reason to rethink about their discount offers. The discounts are expected to be down by more than 40 per cent soon with both Swiggy and Zomato. UberEats is expected to report an even larger cut in discounts to its customers.