Uber: Dominating Ride-Sharing and Delivery

Uber Technologies Company Overview

Zacks Rank #3 (Hold) stock Uber Technologies (UBER) is the dominant player in the North American ride-sharing business. Beyond the United States, Uber has expanded its business into multiple worldwide areas, including Canada, Latin America, Europe, the Middle East, and Asia (excluding China). Through its mobile application and vast network of drivers, Uber offers various services to customers based on details like the number of riders, vehicle style, pets or no pets, and rushed services (for a higher fee). In addition, Uber has diversified into the delivery business.

Uber Eats Booms

While the COVID-19 pandemic upended many businesses, Uber benefitted. Because of stay-at-home policies, food delivery services like Uber Eats and DoorDash (DASH) have seen online order volumes surge. Even after economies reopened, the habit of placing orders online has stuck – especially among the younger generations. Meanwhile, in a recently announced multi-year partnership, Delta (DAL) SkyMiles members can earn miles on Uber rides and Uber Eats deliveries. Meanwhile, Uber Ears has partnerships with Costco (COST), Domino’s (DPZ), MapleBear (CART) (Instacart) and countless others.

Uber & Waymo Partnership

A bearish argument against UBER is that autonomous robotaxis will replace UBER. However, Uber has partnered with the leader in autonomous taxis, Alphabet’s (GOOGL) Waymo. Waymo is currently the only active robotaxi service in the US and is available in multiple states. Customers can book Waymo robotaxis through the regular Uber app, maintaining the familiar Uber experience.

Improving Fundamentals

UBER has finally scaled to the level where it is a consistently profitable business. In 2023, UBER finally turned a profit; since then, it hasn’t looked back.

Another positive sign is that with improved cash flows, UBER management is intent on rewarding shareholders. Last year, the company announced a massive $7 billion buyback program – the first in company history.

Stellar Relative Strength

Uber shares are holding up extremely well compared to the general market and its main competitor, Lyft (LYFT). Year-to-date, UBER shares are up 21.7%, while LYFT has sunk 17%, and the S&P 500 is down 12.44%.

Should the market rebound, UBER is poised to morph into a leader.

Bottom Line

Uber Technologies has morphed into a fundamental market leader with consistent profitability. In addition, a share buyback program, robust relative stock performance, and a dominant position in the ride-sharing and food delivery markets put the stock in a strong position for the remainder of 2025.

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

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