Uber Freight valued at $3.3B
Uber Freight raised $500M by selling stake to private equity firm Greenbriar Equity Group. Yahoo Finance's On The Move panel discusses.
Video Transcript
ADAM SHAPIRO: Now let's get back to Uber, because those shares are off about a little more than half a percent today on news that they're going to be divesting themselves of the Uber Freight Truck brokerage arm, about $500 million. They're going to-- the-- the biggest part of this, selling their stake in this. Let me start with Emily on this one. Is this a smart move for them, or is this, because of the pandemic, they've got to reconfigure their business model?
EMILY MCCORMICK: I think it's probably a little bit of both, Adam. I mean, if we think about Uber's business, just taking a look at the last quarterly results that we had, it really was driven here, these results, by the food delivery business. We even saw the ride-hailing business turning negative when it came to gross bookings year over year. Same thing here with freight, really seeing some weakness here. Freight, along with those other ambitious parts of the business, like the advanced technology group, even, like, the food delivery business, also being actually money-losing for the company on an adjusted EBITDA basis.
So I think at this point, Uber is trying to become a somewhat leaner company, divesting away from some of these moonshot goals, some of these businesses that are outside of the core platform, outside of ride-hailing, which actually is profitable for the company if we just take a look at it at a unit by unit basis, and focusing here on, again, this core part of the business model going forward.
RICK NEWMAN: Back in the 1990s, the business school mantra was "focus on your core competency, and don't get involved in extraneous lines of business." So maybe Uber is learning or re-learning that lesson. I-- I think Emily's got it exactly right. This has been a sprawling operation, and they just seem to be consolidating down a little bit. They probably need to consolidate down a lot more to get to profitability. Do what you do best, and forget about the other stuff.
