Uber Eats Keeps Getting Smaller
Uber (NYSE: UBER) Eats is shrinking its footprint once again. Following the company's decision to back out of food delivery in South Korea in October, the ride-hailing giant is selling its Uber Eats India business to Zomato, an Indian app-based food delivery company, for $35 million and convertible stock equivalent to a 10% stake in the company.
CFO Nelson Chai explained the move, saying, "It is another proof point -- following our decision to exit Uber Eats South Korea in October 2019 -- of our commitment to take a hard look at Eats markets where we do not have a path to leadership. At least some of the investment that we would have otherwise made in India will now be redeployed to other countries we serve where we believe we have a clear path to #1 or #2."
Investors cheered the move, sending Uber shares up 7% as they seemed to interpret it as another step on the company's long road to profitability. Following a familiar playbook, at the same time, Uber cut its losses and took a stake in a fast-growing start-up in an emerging market.
Source Fool.com
