Uber Eats Is exiting the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay, and Ukraine, according to a regulatory filing from today flagged by TechCrunch. The company’s ride-hailing business will not be affected.
The filing notes that, “These decisions were made as part of Uber’s ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others.” The company will “fully discontinue” operations in the above companies by June 4, 2020.
Uber also announced, in the same filing, that it is transferring its Eats business in the United Arab Emirates to its wholly owned subsidiary Careem, which operates a ride-hailing business around the Middle East.
The company will “look to reinvest these savings in priority markets where we expect a better return on investment.”
An Uber spokesperson told TechCrunch that the filings are not related to coronavirus. Rather, they are part of the company’s strategy to be in the first or second position in all of its markets. Earlier this year, the company sold its Eats business in India to local third-party delivery service Zomato. It exited the South Korean food delivery market last year.
Worldwide, the third-party food delivery sector is feeling the economic strain brought on by the COVID-19 pandemic, which has forced many restaurants to close and made some customers wary of ordering out. Hailed not so long ago as the lifeline for restaurants, delivery services are now struggling with the rest of the industry. Last week, Delivery Hero subsidiary Foodora exited the Canadian market. UK-based Deliveroo, which recently got much needed approval on its investment from Amazon, said last week it was cutting 15 percent of its staff.
Stateside, local governments are imposing mandatory caps on the commission fees third-party delivery services charge restaurants, a move that could further erode both the on-demand business model these companies rely on as well as any shot they might have at future profitability. Uber’s news today will not be the last we hear of delivery services leaving entire markets and restructuring their strategies moving forward.