Uber Technologies, Inc. (UBER) will stop restaurant deliveries via its Uber Eats app in Brazil effective March 7, 2022, according to Reuters. Shares of the mobility company dove 2.8% on the news to close at $42.03 on January 6.
Uber Eats Brazil
Uber faces stiff competition for its restaurant delivery service in Brazil from local players such as Rappi, backed by SoftBank Group Corp., and iFood, which is a part of Movile. In a strategic move, Uber Eats has decided to stop delivering in this segment and instead focus on grocery delivery for its Cornershop and Uber Direct businesses.
The restaurant delivery will remain active up to March 7, 2022. Meanwhile, customers can use the app to order groceries and other items from supermarkets and wholesalers nearby after March 7, 2022.
Uber acquired the grocery delivery startup company Cornershop in 2019. Besides Cornershop, its delivery business includes Uber Flash, a package delivery service, and Uber Direct, which provides same-day delivery services to retailers and small businesses. These services are available across 100 cities in Brazil.
A spokesperson for Uber said, “People can continue to rely on the app to find the best selection of supermarkets and wholesalers in Brazil, as well as home decor, beverages, and pet supplies, among others… The unique combination of our scale and leading technology across mobility and delivery will allow our users to go anywhere and get anything they want.”
Recently, Wolfe Research analyst Deepak Mathivanan lowered the price target on the stock to $55 (30.9% upside potential) from $62, while maintaining a Buy rating.
Some of the Top Analysts have awarded Uber a Strong Buy consensus rating with 19 Buys and 1 Hold. The average Uber price target of $69.15 implies 64.5% upside potential to current levels. Shares have lost 21.1% over the past year.
TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into UBER’s performance.
In December, Uber website traffic recorded an 8.19% year-over-year increase in monthly visits. Similarly, year-to-date website traffic growth increased by 13.46% compared to the same period last year.
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