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UBER’S LOSSES NARROW DESPITE LYFT’S GAINS: Uber increased its revenue and narrowed its losses in Q2 2016 in the face of increased competition from Lyft and a spate of recent scandals that led to the resignation of its former CEO, Travis Kalanick, Bloomberg reports. The ride-hailing giant increased its net revenue 17% from the previous quarter to $ 1.75 billion, while its losses decreased 9% to $ 645 million.
All of the various scandals and controversies surrounding Uber in recent months did not seem to dent the company’s financial health. It ended the quarter with $ 6.6 billion in cash on hand. Meanwhile, gross bookings — the total dollar value generated from its rides — increased to $ 8.7 billion, up 17% from Q1. That growth in gross bookings actually accelerated from 9% the previous quarter.
However, rival Lyft has still been making gains on Uber, despite the larger company’s continued growth.
- Uber’s share of the US ride-hailing market fell from 84% at the beginning of this year to 77% at the end of May, according to Second Measure, which analyzes anonymized credit card data.
- Uber’s market share decline coincided with major growth at Lyft, which saw a major boost from the #deleteUber social media campaign. Lyft had a 60% spike in new users when the campaign started in January. That helped the company net 4.8 million total passengers during February 2017, more than double the number it serviced in February 2016.
- Lyft also grew its gross booking faster than Uber did in Q2, with a 25% jump to $ 1 billion.
Uber remains mired in controversy following Kalanick’s departure, and needs to fill several key executive positions to help it handle increased competition around the world. In addition to its open CEO position, the company has also been searching to fill its COO and CFO positions. For now, the company is being steered by an executive committee. Meanwhile, Kalanick has been sued by Benchmark Capital, one of Uber’s biggest investors, which claims he has been undermining the CEO search. Uber’s competitors have moved aggressively in recent months to gain market share and take advantage of Uber’s damaged reputation. Lyft has expanded to more cities in the US, raised new funding, debuted premium ride services to compete with UberBLACK and UberSUV, and launched a new self-driving car division to beat Uber to autonomous taxis. Grab, Uber’s biggest rival in Southeast Asia, also raised $ 1.5 billion in new funding earlier this year. Uber must fill its leadership void and develop a strategy to counter these moves by its competitors. However, it’s unclear if that will happen soon, as the company’s board is reportedly split over possible CEO candidates.
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FLYTREX AND AHA LAUNCH DRONE DELIVERY IN ICELAND: AHA, Iceland’s largest online marketplace, has partnered with Israeli drone startup Flytrex to deliver online meal orders and other goods by drone in Iceland’s capital, Reykjavic, CNBC reports. The launch of a commercial drone service in a highly populated area marks an important step forward for drone delivery around the world, as most drone deliveries conducted today are still early-stage tests in rural areas.
Right now the drones only operate a single delivery route across the bay that cuts Reykjavic in two and makes delivery by ground vehicle in the city very time-consuming. An employee at an AHA facility loads packages on to the drone, which then flies autonomously across the bay to another facility, where a courier picks up the package and takes it to the customer’s home, according to The Verge. The two companies say that drones have cut their delivery times by up to 20 minutes during peak hours, and have cut delivery costs by 60% compared to regular ground delivery.
Flytrex doesn’t build the drones itself — in this case it’s using a DJI Matrice 600 outfitted with a special package compartment — but provides the software and services that make the program operational, including employee training, drone maintenance, and a cloud-based platform for remotely tracking and managing the drones in-flight. Flytrex CEO Yariv Bash said that the company hopes to expand the partnership to more delivery routes — including delivering directly to customer’s doorsteps — by the end of the year. The drones will hover in the air and lower packages to the ground by a wire to drop them off at customers’ homes.
Flytrex and AHA received regulatory approval to launch the service from the Icelandic Transportation Authority, which said the drones could improve road safety by taking delivery vehicles off the roads. Regulatory authorities in most jurisdictions around the world have taken a cautious approach to drone deliveries, particularly in densely populated areas. China’s Civil Administration, for example, allows companies to conduct commercial deliveries by drone in rural areas, but specifically forbids companies from using drones to deliver in cities. In the US, the FAA has yet to allow a commercial drone delivery program to operate in a major city, but NASA and 7-Eleven have each conducted limited drone delivery tests in Reno, Nevada. Improvements in autonomous flight technology and in air traffic control systems that can track large numbers of drones are necessary before regulators allow large-scale drone delivery programs to operate in US cities.
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AUDI AND QUALCOMM INVEST IN CONNECTED CAR STARTUP: Cubic Telecom, a connected car startup based in Dublin, Ireland, raised $ 46.5 million in Series C funding from a group of investors that includes Audi and Qualcomm. Cubic has already been working for a while with Audi, and is on track to put its technology into 1 million vehicles by the end of the year, according to CEO Barry Napier.
The startup offers a virtual networking solution that lets cars (and other devices) connect automatically to internet service providers in any country, which helps cars maintain internet connection when they cross borders and eliminates roaming costs. It accomplishes this through a virtual SIM card that it preloads on to vehicles during the manufacturing process.
Typically, automakers have to install a physical SIM card into their cars for connectivity, and arrange network agreements with carriers in whichever country the model might be sold. Each network agreement requires a different SIM card, making managing these partnerships and the physical hardware a time-consuming operational task. Along with the virtual SIM card, Cubic has partnerships in place with 30 mobile network operators covering more than 180 countries, eliminating the hassle of arranging and managing network agreements for automakers.
With automakers putting more and more digital technologies in their cars, they have to manage increasingly complex ecosystems of digital partners that include connectivity, cloud, analytics, cybersecurity, and infotainment providers. That is a complex task for companies like automakers that don’t have roots in the digital world. That means companies that can help automakers manage those ecosystems — as Cubic does with networking providers — will be particularly valuable partners for auto companies.
In other news…
DHL eCommerce, Deutsche Post DHL’s e-commerce fulfillment division, launched a new software-as-a-service (SaaS) platform in partnership with logistics management solutions provider FarEye to help it manage deliveries on behalf of its retail clients. The platform will help DHL, retailers, and their customers track orders in real-time as they make their way through the fulfillment process to final delivery. DHL said that it picked the platform to support its e-commerce fulfillment division because of the flexibility it offered in being able to scale up computing resources depending on demand. That will allow it to draw on more resources during peak shopping and delivery times.
FedEx announced it is expanding its same-day intra-city delivery service to Jacksonville, Florida, as well as Austin and San Antonio, Texas. The service, dubbed FedEx SameDay City, is now available in 25 markets, and allows same-day delivery on orders picked up as late as 1:00 p.m. for business delivery, and 4:00 p.m. for residential delivery. The move comes as more retailers are experimenting with same-day delivery. Walmart announced recently that it is expanding a same-day delivery test it is running with Uber’s UberRUSH delivery service to new markets, while Target is now testing same-day grocery delivery in New York.
