Rapid growth in Uber’s food-delivery business was not enough to offset dwindling demand for rideshares, as the company’s revenues for the final quarter of 2020 fell short of Wall Street expectations.

Compared to 2019, gross rideshare bookings were down 50 per cent in the October-December period, as lockdowns were reinstated in some markets. Revenue for the segment declined 52 per cent year-on-year, missing analysts’ targets.

In contrast, its delivery platform continued to outperform expectations, generating revenues of $1.36bn, up 224 per cent on the same period last year.

Despite that boost, Uber is still some way from making money from its delivery arm, which lost $145m — before deducting for interest, tax and depreciation — in the three-month period. Analysts had been expecting a larger loss of almost $180m.

Overall, Uber said it had generated $3.17bn in revenue in last year’s fourth quarter, down 16 per cent year-on-year and 2 per cent below Wall Street projections, according to consensus figures compiled by FactSet.

The company’s shares fell more than 3 per cent in after-hours trading.

Uber’s total net losses for the quarter were $968m, of which it said $236m were stock-based compensation expenses.

In total, Uber lost $6.8bn in 2020 — a 20 per cent improvement on 2019. The company reiterated its target of having a profitable quarter, on an earnings before interest, taxation, depreciation and amortisation basis, at some point this year.

“While 2020 certainly tested our resilience, it also dramatically accelerated our capabilities in local commerce, with our delivery business more than doubling over the year to a nearly $44bn annual bookings run-rate in December,” said Dara Khosrowshahi, chief executive.

Line chart of Uber gross booking value, by segment ($bn) showing Changing needs during Covid

The company had more positive news for investors on a quarter-by-quarter basis, with bookings and revenue growing more than 10 per cent compared to the July-September period. The number of active users of Uber grew 19 per cent from the previous quarter to 93m. The number of trips in the fourth quarter surpassed 1bn for the first time since the pandemic began, it said.

Khosrowshahi told investors the company had seen signs of “pent up desire to start moving again” in markets that are opening up. Taiwan had increased on pre-pandemic levels, and Latin America was improving “faster than expected”, according to chief financial officer, Nelson Chai.

Lyft — Uber’s only significant rideshare competitor in North America — on Tuesday said revenues fell 44 per cent from the previous year in the fourth quarter. It said ebitda profitability was possible in the third quarter, if the number of vaccinations kept apace and demand for rides increased.

Column chart of National market share of US delivery apps (%) showing Hot dinners

To hit its profitability target, Uber offloaded its autonomous driving unit to self-driving company Aurora. Elevate, Uber’s programme to build a flying car, was sold to Joby Aviation.

But it has invested in expanding its delivery business, seeking to increase geographical coverage and average basket size. The company last week announced that it had purchased alcohol delivery service Drizly in a deal worth $1.1bn. Uber said it planned to integrate Drizly into the Uber Eats app while maintaining it as a standalone service also. The deal also gave the group licensing to distribute alcohol in more than 1,400 cities across the US.

At the end of 2020, Uber closed its deal to acquire rival delivery platform Postmates for $2.65bn, a move that it said would help it increase share in key markets, particularly Los Angeles, Miami and Phoenix. The company also bought Latin American grocery app Cornershop.

However, data from research company Second Measure suggests Uber Eats, even with Postmates, is still a second-place player in the US delivery market behind DoorDash.

“We think that we’re more than holding our own,” Khosrowshahi told investors.