NEW YORK (BLOOMBERG) – Uber Technologies reported declining revenue in the fourth quarter, showing that demand for food delivery isn’t making up for a falloff in ridership.

Sales dropped 16 per cent to US$3.17 billion (S$4.2 billion), short of an average of analyst estimates compiled by Bloomberg. Performance in Canada, Latin America and the US was particularly dismal. The stock was down about 4 per cent in extended trading.

Despite the shortfall, Uber narrowed its loss in the quarter that ended in December, riding a wave of deals that shed some of its more fanciful pursuits.

It turns out that autonomous vehicles and flying cars weren’t helping Uber achieve its goal of a quarterly profit before interest, taxes and other expenses by the end of this year. In the fourth quarter, when it sold those two business units to star-ups in exchange for equity, Uber posted an adjusted loss of US$454 million, beating analysts’ estimates.

In its quarterly results released on Wednesday (Feb 10), Uber said it’s still on track to turn an adjusted profit some time this year. And it disclosed yet another asset sale, confirming a Bloomberg report in September that it was selling part of its stake in the Chinese ride-hailing company Didi Chuxing. Uber said it sold US$207 million of the shares and has an agreement to sell US$293 million more.

Uber didn’t offer a forecast in the report. Chief executive officer Dara Khosrowshahi indicated that better times may not arrive until the summer. “We’re bullish that we can deliver strong growth and expanding margins in the second half of the year,” he said in a conference call with analysts.

Before the coronavirus pandemic upended Uber, the company had Amazon.com-sized ambitions. Cratering demand for Uber’s main product – rides – forced Mr Khosrowshahi to sell off or abandon pricey initiatives and reduce spending. His strategy relies on two businesses: delivery and transportation.

As the pandemic drags on, delivery is the star. The unit continued its surge, with 130 per cent growth in the fourth quarter to US$10.05 billion in gross bookings. Analysts expected US$9.77 billion.

Amid all the cost trimming, delivery is one area Uber has invested heavily. It finalized the US$2.65 billion purchase of food delivery company Postmates late last year and agreed to acquire booze delivery provider Drizly for US$1.1 billion. The latter acquisition complements Uber’s food business and will drive growth, JMP Securities analyst Ron Josey wrote in a report this month. Morgan Stanley noted the opportunities to expand the service internationally and sign advertising deals.

In rides, Uber saw demand rebound unevenly in different regions. Mobility gross bookings were down by half to US$6.79 billion in the fourth quarter compared with last year but have been inching up since the darkest days of the pandemic. The performance fell short of analysts’ expectations.

One closely watched metric – the number of customers who use the platform each month – dipped 16 per cent to 93 million in the fourth quarter, better than Wall Street estimates. Uber is adding new customers, but they tend to be more price sensitive, Mr Khosrowshahi said on the conference call.

Uber ended the year with US$5.6 billion in cash, more than expected, but only about half of what the company had at the end of 2019.