With the power of Uber behind it, Uber Eats has experienced significant growth since it launched and has become a billion-dollar business.
This situation has managed to capture a lot of people’s curiosity with regard to the company’s financial status. For anyone wondering whether Uber Eats is profitable with all this, read on!
Is Uber Eats Profitable In 2022?
Uber Eats has reported that it’s had some profitable months recently but is still considered unprofitable in 2022. Profitability means that a company has managed to turn a profit and sustain that over a long period of time, but Uber Eats is yet to achieve this. Like Uber Eats, most food delivery services, including Doordash and Grubhub, still aren’t profitable.
Keep reading to learn everything you need to know about Uber Eats and profitability, including how profitable it is for drivers and restaurants, why the company still isn’t profitable, and more!
Why Isn’t Uber Eats Profitable?
Uber Eats has struggled to attain profitability because the cost of operations still takes up a large part of its income.
According to different studies performed by economists, food delivery services only keep between 2.5% and 3% of what the customers spend on each order.
A significant portion of Uber Eats’ gross earnings go to the following:
- Advertising and promotion
- Third parties such as service charges for hosting (Amazon Web Services) and transaction fees for payment processors
At the end of the day, the company’s expenses outpace its income, and that’s why it still hasn’t become profitable.
When Will Uber Eats Become Profitable?
Uber Eats has not made any statements or hints about when it expects to become profitable, so all we can do is speculate.
During some months of 2021, Uber Eats reported that it made a profit, but this does not translate to profitability.
Profit is different from profitability in that the former is absolute and short-term in most cases, while the latter is relative and usually determined over a long period of time.
Profit is when the income is higher than the expenses, no matter how low the difference is, so even $1 qualifies.
In contrast, what constitutes profitability changes depending on the size of the company you’re looking at.
Profitability is also attained when the company doesn’t have to put in a lot of effort or invest so much to make certain profit amounts.
For example, a small company making a $10 million profit in a year would make it profitable.
However, a company as big as Uber Eats making the same amount, even for several consecutive years, still wouldn’t make it profitable.
Therefore, we can assume that it’s going to be a while before Uber Eats becomes profitable unless it does the following:
- Significantly raises the prices on its platform
- Takes a larger cut of sales from the restaurants
- Cuts drivers’ pay
How Much Money Does Uber Eats Make?
Here’s how much money Uber Eats makes:
- $600 million
- $1.5 billion
- $1.9 billion
- $4.8 billion
- $8.3 billion
Uber Eats’ revenue in 2021 was $8.3 billion, up from $4.8 billion the previous year following the December 2020 acquisition of Postmates.
How Much Money Does Uber Make?
Here’s how much money Uber makes:
- 2014 -$400 million
- 2015 – $1.7 billion
- 2016 – $5 billion
- 2017 – $7.9 billion
- 2018 – $11.3 billion
- 2019 – $14.1 billion
- 2020 – $11.1 billion
- 2021 – $18.3 billion
Uber made $18.3 billion in 2021, $8.3 billion of which came from Uber Eats.
Uber still isn’t profitable and it’s down to most of the same reasons as Uber Eats.
How Does Uber Eats Make Money?
Uber Eats makes money through the following avenues:
- Commissions – Uber Eats takes a cut of all the money that restaurants earn through its platforms. This cut changes depending on which services the restaurant accesses on the platform, including marketing and delivery
- Fees – Uber Eats charges its customer’s different fees, including ones for service and delivery
- Advertising – restaurants on Uber Eats have the option to pay for advertising and place bids against other businesses on the platform for visibility
- Corporate partnerships – Uber Eats works with other companies in deals where it can get paid to promote them, e.g. providing rentals to drivers through a partnership with Hertz
- Subscriptions – Uber Eats has a premium subscription program called Eats Pass that costs $9.99 a month and grants access to different perks such as free delivery on orders above $15
Uber Eats still isn’t profitable despite having one quarter where it registered a profit. Uber Eats still hasn’t said when it expects to become profitable but it seems unlikely without a complete overhaul of most of its operations.
Uber Eats makes money through fees, commissions, premium subscriptions, corporate partnerships, and advertising. Like Uber Eats, most major food delivery companies also aren’t profitable.