Uber Delivers Profit at 26 Million Daily Trips
VDC's return to Tik-Tok, Instacart and Hy-Vee, Super Bowl ad budget
They said it couldn’t be done… but Uber just proved you can make a profit running a global scaled delivery and mobility app. Let’s break those numbers down, plus take a bite of Virtual Dining Concept’s latest launch, Hy-Vee’s new deal with Instacart and some Super Bowl spending.
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Today:
Assessing Uber’s $1.1 Billion Profit
Virtual Dining Concepts Launches Creators’ Kitchen
Chart Time | Super Bowl Ad Rates
Instacart FaaS Powers up Hy-Vee
3PD | Uber Profitable On $37.3B of Delivery & Mobility Revenue
Uber just dropped its 2023 financial results, not only beating analysts’ consensus but achieving a meaty $1.1 billion operating profit (no “adjusted EBITDA” handwaving necessary…) The results sent company shares skywards, with its market cap flirting with $150 billion, an all time high. In Q4, mobility gross bookings were up 29% YoY to $19.3 billion, delivery was up 19% to $17B, while freight fell 17% to $1.3B. “2023 was an inflection point for Uber, proving that we can continue to generate strong, profitable growth at scale,” said Dara Khosrowshahi, CEO. “Our audiences are larger and more engaged than ever, with our platform powering an average of nearly 26 million daily trips last year.”
The Big Picture: While it’s worth noting that $1 billion of the company’s earnings were due to an increase of carrying value in its investments in the likes of Aurora and Didi, its performance still dwarfs that of Delivery Hero, which only saw GMV climb 1.5%. The company’s revenue margin for delivery actually fell a bit due to business model changes that reclassified certain sales and marketing expenses, down to 18.3% from 20.5% the year prior. Mobility’s take rate improved to 28.7% from 27.8% (watch out dyslexics.) The company’s foray into non-food delivery looks to be paying dividends, with over a fifth of its delivery growth coming from grocery and retail. And speaking of dividends, rumor has it the company is considering paying one…
VIRTUAL RESTAURANTS | VDC Launches TikTok Creators’ Kitchen
Virtuak Dining Concepts is back in action, with the launch of “Creators' Kitchen As Seen On TikTok.” Featuring menu items inspired by viral creations on the popular social app, the concept hopes to tap into TikTok’s 1 billion plus subscribers’ stomachs. Launch items include Pasta Chips & Dips inspired by @bostonfoodgram, Baked Feta Pasta inspired by @feelgoodfoodie, Chopped Italian Sandwich inspired by @ninjacue, and Crispy Lemon Chicken with Arugula inspired by @chefdonny; evidently Italian food is really hot right now?
The Big Picture: VDC has been keeping rather quiet since its dustup with YouTube star MrBeast. This splashy return to the limelight has been in the works for some time; the company originally planned a TikTok branded concept in late 2021. At the time the project was called TikTok Kitchen, that stalled out after the video app fired marketing head Nick Tran. Perusing the Creators’ Kitchen website, it looks like the host kitchens are familiar partners for VDC: Buca di Beppo, Brio Italian Grill, Bravo Italian Kitchen (which shares ownership with VDC) — all of a sudden the pasta and cold cuts focus makes a lot of sense.
CHART TIME | UE & DD Hope for an Expensive Touchdown
The Super Bowl is this weekend and you know what that means… ads! The cost of a 30 second spot has soared to $7 million, up from $42,500 ($372,390 adjusted for inflation) in 1967. With both Uber Eats and DoorDash shelling out big bucks, the real value comes not just from the half minute of TV, but from the wrap around campaign and national conversation that brands hope to spark (and given that we’ve been talking about it for a few weeks now, I guess it’s working.)
DIRECT | Hy-Vee Chooses Instacart Fulfillment
Midwestern grocer Hy-Vee is expanding its partnership with Instacart, adding on the deliverer’s Fulfillment as a Service layer. That means Instacart’s network of 600,000 shoppers will assist the supermarket with picking, packing and same-day delivery, even for orders handled by Hy-Vee’s first party website or app. Hy-Vee will continue using its existing workforce as necessary, tapping in to Instacart’s delivery and pickup services when demand necessitates.
The Big Picture: Instacart has had a partnership with Hy-Vee since 2018, but that was limited to its more traditional experience where IC only handled orders that came in from its own channels. Adding Hy-Vee, the nation’s 36th largest grocer with $12.7B in sales, is a great validator for Instacart FaaS, as its white-label product doesn’t tend to attract the same level of service as competitors like Uber Direct or DoorDash Drive.
A Few Good Links
Shein and TikTok poach Amazon execs. More details on Grubhub + JOCO courier lounges. Hyzon names new comms, branding chief. Teamsters protest new Uber political push. Jow raises $13M for personalized grocery recommendations. Amazon’s unified pickup fights for Walmart’s grocery share. Barclays buys Tesco Bank. Starship shares more details on $90M fundraise, notes off-campus deliveries in Midwest. Waymo dings occluded bicyclist, nobody injured. Yum Brands on expansion spree. World’s largest resto franchisee mulls sale. Jonah Bliss on Food Fight podcast, discussing delivery robots and regulatory conditions.
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