Please ensure Javascript is enabled for purposes of website accessibility

Uber Eats Exits 7 International Markets, Transfers UAE Operations to Subsidiary

By Aditya Raghunath – May 5, 2020 at 10:31AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Will Uber Eats' latest exit help the ride-sharing leader to improve profit margins?

In a May 4 SEC filing, Uber (UBER 0.83%) announced that its Uber Eats division will exit seven international markets and discontinue operations in the Czech Republic, Saudi Arabia, Egypt, Honduras, Romania, Ukraine, and Uruguay.

These markets accounted for 1% of total Uber Eats gross bookings and 4% of adjusted EBITDA losses in the first quarter of 2020, according to the filing.

In addition, the company will transfer the Uber Eats business in the United Arab Emirates (UAE) to a wholly subsidiary, Careem. Its customer base and restaurant partners in the UAE will be moved onto the Careem platform in the upcoming weeks.

A food delivery executive is delivering food to a customer

Image source: Getty Images.

Uber stated, "These decisions were made as part of Uber's ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others....... Consistent with our stated strategy, we will look to reinvest these savings in priority markets where we expect a better return on investment."

This is not the first time Uber Eats has made a strategic decision to exit international markets. Last October, Eats discontinued services in South Korea, and earlier this year, it sold the Indian business to Zomato.

These exits will help the ride-sharing technology giant reduce operating losses at a time when its flagship business (Uber Rides) is grappling with lower demand. Last year, the company targeted adjusted EBITDA profitability by the end of 2021. One way to increase profit margins is by selling loss-making businesses.

Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Uber Technologies, Inc. Stock Quote
Uber Technologies, Inc.
$26.72 (0.83%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.