Uber, the ridesharing company, has fixed its brand and made a turn around in critical areas of its business, all in a bid to take Uber public. Yet the stock has taken a beating. It lowered its pre-IPO valuation and priced its stock appropriately, but it is still experienced an overall decline for the year.
The ridesharing entity cut its losses, sold its ridesharing division in Asia, took stakes in competitors, and focused on other markets. Now, the company is stepping up its efforts in increasing its utility by getting into another market, the grocery delivery business.
Uber will enter the grocery delivery business in countries like Canada, Chile, Mexico, and Peru. The public company announced Friday, October 11, 2019, that it would provide customers in select countries with the ability to utilize Uber for grocery delivery services. To that end, Uber took a controlling interest in Cornershop. Sources note that Uber should finalize this deal by the first half of 2020.
Users will access a suite of services from daily transportation, food delivery, micro-mobility services such as scooters and bikes, to its soon to arrive grocery delivery business.
“Whether it’s getting a ride, ordering food from your favorite restaurant, or soon, getting groceries delivered, we want Uber to be the operating system for your everyday life,” its CEO noted in a prepared statement.
The strategic investment in Cornership makes sense on the surface. Cornershop has partnerships with prominent retailers like Walmart, Costco, and Chedraui, according to Reuters. An investment in Cornershop would give Uber substantial exposure to existing retailers giving it a strong base to enter into the grocery delivery market.
Uber Is Still In The Rough
The company looks like it has a long way to go in making strides to profitability. It faces a variety of threats, ranging from regulatory to competitors such as Lyft, and others in its other mobility businesses. Regulatory issues are still present, which could be a substantial factor in the viability of its operations.
Uber is testing out other modes of transportation such as helicopters and boats in select areas. Its also testing out an application that connects gig workers to businesses in Chicago.
Does this move indicate a buy for Uber? Uber’s fundamentals are still the same and will still have to take material actions to continue to reform the business and reach profitability.
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