Why did Uber Eates withdraw from Egypt and other countries?
Increasing investor pressure to stop losses and achieve profits
Uber, which has a global market for delivery services across millions of subscribers in many countries of the world has consecutive losses. Some users or employees of Uber. Where some believe that Uber gets good sums through its rate on each delivery, and it is impossible to experience a loss, but this is the fact, Uber is losing. Where Uber Eats drop from Egypt, Saudi Arabia and the UAE in addition to 5 other countries, they are Romania, Honduras, Ukraine, the Czech Republic and Uruguay after two years of being on the market.
Uber, since its public offering in May 2019, has incurred huge losses so that its total losses amounted to 8.5 billion dollars by the end of last year, according to CNN, and these losses are due to the "Uber" policy that depends on burning investments in order to achieve rapid growth and win the largest marketshare. As Uber seeks to acquire the market significantly, one of the biggest deals that it has done is to buy its competitor, Karim, for $ 3.1 billion, in order to retain the largest share in the marketshare.
But it seems that the American company finally decided to abandon this policy and rely on rapid profit in light of the Corona crisis, after increasing investor pressure to stop bleeding losses and achieve profit, especially as it continued its losses in the first quarter of 2020 and even suffered the greatest loss for three The quarters, which amounted to $ 2.9 billion, because of due to a decrease in demand for passenger transport service 5% due to the Corona epidemic, as well as a loss of investments of $ 2.1 billion, according to its financial report published on (Uber Investor).
With this new policy, it has become reasonable for Uber to account for these eight non-major markets, especially since they represent only 1% of total application bookings in 2020, and at the same time accounted for 4% of total losses, according to the profit statement.
On the other hand, looking at the food delivery market in Egypt, we find that it is growing rapidly, as Statista indicates that the value of this sector reached $ 81 million in the current year 2020, and it is expected to increase to $ 145 million by 2024, as it is The number of users in this sector is currently 1.5 million, and this number is expected to increase to 3 million by 2024.
However, despite these growth opportunities, in contrast, there is fierce competition, after the withdrawal of the "Glovo" and "Carriage" companies, "Uber Eats" is sharing (Market share) with 12 other companies, including "Otolb", which covers more than 5000 restaurants inside 26 cities, and owns the largest share of this sector, in addition to a number of applications such as "elmenus" that covers more than 30 areas in Cairo and Alexandria, and "eat me" that contains more than 1500 restaurants, in addition to "Hala" which covers 5 areas in Cairo and Alexandria.
And with the emergence of more than one new player in the market, such as the application "Saudi Messenger", "" foam "and" Hua "in addition to the platforms" Yamamia "and" mm "for home eating, and the application" Lucky "and" provided "and the company" Serv "which Food reached some areas in Cairo, competition intensified more, and the bet on "Uber Eats" to become number 1 or 2 in the market became very weak.
On the other hand, the withdrawal of "Uber Eats" from the market put companies between the two sides of a difficult equation, which is the expansion and occupation of this empty space at a time when everyone focuses on survival, not growth and expansion, knowing that Uber Eats was covering 50% of the urban areas in Cairo, according to For the statements of Ahmed Yousry, the general manager of the service in Egypt, which was reported by Al-Mal newspaper.
It appears that the company "Otolb" will be a strong party in the competition for the "Uber", and has already begun to move towards this expansion through an initiative launched a few days ago to identify workers affected by the withdrawal of "Uber Eats" from the market. Otolb may win a higher percentage in the market share, but this does not prevent the presence of surprises that may appear in the coming months in the food delivery services or a strong new competitor appears.