Delivery Segment Going Strong at UBER: More Upside Ahead?

Uber Technologies UBER is actively diversifying its operations. Even though Uber’s primary business is ridesharing, it has diversified into food delivery over time. Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area.

Uber is benefiting from the boom in its Delivery business. Ever since the pandemic, when home delivery was adopted on a large scale and online order volumes surged, this business has never looked back. Revenues from the Delivery segment increased 25% year over year on a reported basis and 23% on a constant currency basis to $4.10 billion in the second quarter of 2025.

Even after economies reopened, the habit of placing orders online stayed among people. Encouraged by the performance of the segment during the pandemic, Uber is making constant efforts to expand its Delivery operations. Uber Eats is the online food ordering and delivery platform of Uber.

Earlier in the month, Uber Eats and retailer Dollar General DG inked a partnership to deliver household essentials across the United States. As a result of the deal, more than 14,000 Dollar General and pOpshelf locations are being brought to the Uber Eats platform. Customers can use the Uber Eats app to order food, beverages and other essentials like personal care products, over-the-counter medications, among other items.

Under the partnership, which kicked off on Aug. 8, Uber Eats is offering 40% off on Dollar General and pOpshelf orders of $20 or more. The maximum discount amounts to $10. Uber One members get free delivery on eligible orders and other savings. Expressing delight at the tie-up, Hashim Amin, the head of Uber’s grocery & retail, said, “We’re proud to help extend Dollar General’s reach into the on-demand economy, and to help retailers like DG serve their customers in more dynamic and flexible ways.”

Moreover, earlier this year, Uber inked a deal with value retailer Five Below FIVE that makes customers of Five Below eligible to use the Uber Eats app for placing orders for delivery from more than 1,500 stores of the discount retailer. The delivery will be made directly to their doorsteps. This partnership allows customers to shop for a range of budget-friendly, trending items, including toys, games, candy, crafts, tech, room décor, beauty and graphic T-shirts. They will be available without any delivery fee for members of the Uber One loyalty program.

The partnership with Five Below is in sync with Uber Eats’ strategy to grow its non-food retail offerings, thereby providing consumers access to a wider range of goods beyond traditional meal delivery.

Given the promise and convenience associated with Uber’s Delivery division, investors will keenly await further expansion-related updates on this highly successful segment.

UBER’s Share Price Performance, Valuation and Estimates

Shares of UBER have gained in double digits so far this year, handily outperforming the Zacks Internet-Services industry on a year-to-date basis.

YTD Price Comparison

From a valuation standpoint, UBER trades at a 12-month forward price-to-sales of 3.46X. UBER is inexpensive compared with its industry.

The Zacks Consensus Estimate for UBER’s 2025 and 2026 earnings has been revised upward over the past 90 days.

UBER's Zacks Rank

UBER currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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