Uber Announces New Features Focused on Profitability and Growth

Uber is introducing a suite of over six new functionalities, including a service enabling users to schedule vaccine appointments at Walgreens and simultaneously book transportation to and from the vaccination site. This move underscores the company’s strategic shift towards a sustainable and profitable business model.

The "Go Get" Strategy and Return to Normal Operations

These newly unveiled features are encompassed within Uber’s “go get” strategy. They also signify a return to more conventional business practices following a 14-month period of disruptions caused by the COVID-19 pandemic.

The diverse range of additions – encompassing vaccine appointment booking, a valet car delivery service, reserved airport rides with up to an hour of waiting time, and the ability to collect food during a ride – all center around Uber’s primary services of delivery and ride-hailing.

Streamlining Uber's Business Focus

In early 2020, Uber’s scope of operations was considerably broader, encompassing ventures like air taxis, autonomous vehicles, delivery services, ridesharing, a freight booking platform, and shared micromobility options such as e-bikes and scooters.

Over the past year, Uber has strategically divested from certain areas, including its Jump shared micromobility unit, the Uber Elevate air taxi project, and its Uber ATG self-driving division, as well as a portion of its Uber Freight logistics arm. (Uber retains equity in these businesses).

This restructuring wasn’t solely about eliminating underperforming businesses. Concurrently, Uber significantly invested in its rideshare and delivery services, acquiring Postmates and Drizly, anticipating that these two sectors would provide the clearest path to profitability. The “Go Get” initiative represents a continuation of this focused strategy.

The Impact of COVID-19 and the Rise of Delivery

The COVID-19 pandemic dramatically impacted Uber’s rideshare business, mirroring the experiences of its competitors, while simultaneously fueling an unprecedented surge in demand for delivery services.

Image Credits: Uber

“Throughout the last year, the company has transformed into a platform centered around two core functions,” stated Uber CPO Sundeep Jain in a recent interview. “These are facilitating user ‘go’ experiences and enabling users to ‘get’ what they need. We’ve effectively evolved this platform to allow users to go anywhere and obtain anything.”

Expanding the "Go" and "Get" Ecosystem

For Uber, this translates to developing products that empower users to “go” to various destinations utilizing diverse transportation methods – including cars, scooters, buses, and public transit – or to “get” a wide array of items, such as restaurant meals, groceries, prescriptions, and alcoholic beverages.

This “go” and “get” principle is shaping the company’s product development and acquisition decisions. Jain highlighted that, following the acquisition of Postmates, Uber even facilitates the delivery of iPhones as an example.

New Features: Uber Rent with Valet and Uber Reserve

Among the new offerings is Uber Rent with Valet, allowing U.S. users to rent a car directly through the Uber app. The vehicle is then conveniently delivered to the user, whether at their home or the airport.

The Uber Reserve feature is also being expanded across the U.S., providing flight tracking, a 60-minute wait time allowance, and curbside pickup options.

Enhancements to the "Get" Side of the Platform

On the delivery front, Uber has launched “Pick Up and Go,” enabling rideshare users to place orders and add a stop to collect them during their journey. A new “schedule” button has also been introduced, allowing users to order from merchants even when they are temporarily closed.

Furthermore, users can now add items from a second merchant to their order at checkout without incurring additional delivery fees.

Additional Features and Programs

Uber has also implemented a savings hub that showcases all available offers, discounts, and deals for users. A new feature provides delivery reminders through in-app notifications, and the Eats Pass membership has been extended.

The company has also broadened existing programs, such as the option to hire a driver for multiple hours instead of a single trip. “This is less common in the U.S. but highly popular in Asia and Latin America,” Jain explained.

Progress Towards Profitability

These initiatives are ultimately geared towards achieving profitability, a goal that appears increasingly attainable. Earlier this month, Uber’s SEC filing indicated that the company still anticipates achieving quarterly Adjusted EBITDA profitability in 2021.

Uber also reported that its gross bookings in March reached a record high for the company’s nearly 12-year history. The mobility business experienced its strongest month since March 2020, exceeding a $30 billion annualized Gross Bookings run-rate, with average daily Gross Bookings increasing by 9% month-over-month. The delivery business also achieved a new all-time record, surpassing a $52 billion annualized Gross Bookings run-rate in March, representing a growth of over 150% year-over-year.

In essence, March marked Uber’s most successful month to date in terms of gross sales on its platform. However, as TechCrunch’s Alex Wilhelm recently pointed out, while the delivery business has expanded significantly, it remains less profitable than the core rideshare business.

Balancing Growth and Profitability

The Go Get program appears designed to identify new avenues for expanding the ride-hailing business – which previously generated positive adjusted EBITDA – while simultaneously growing the delivery segment without increasing costs. It also reflects evolving consumer behaviors influenced by the COVID-19 pandemic.

“We’ve observed users increasingly favoring advanced reservation products, a use case that wasn’t as prevalent before. Previously, it was primarily on-demand,” Jain stated. “Consequently, we’ve made substantial investments to enhance the user experience with upfront driver assignment, improved reliability, and assurances. This is why we’re making a significant announcement regarding reservations, which have become a more popular choice.”