Uber will become an ad platform, selling space inside its Eats app to restaurants hoping to lure in more food delivery orders.
An Uber spokesperson confirmed the company would be entering the ads business, telling TechCrunch “We are exploring relevant ads in Eats.” Selling ads could help it improve margins on Eats, where it only takes 10.7% of gross bookings as adjusted net revenue since it pays out so much to restaurants and drivers.
The fresh opportunity in ads comes at a critical time when Uber is desperate to show its future potential in the face of a sagging share price that closed at $28.02 yesterday, down 40% from a high of $46.38 in June. Today, Uber’s post-IPO stock lock-up expires and early investors are able to sell their shares, putting newfound pressure on its stock.
Ads could also serve as a wedge for Uber to move deeper into business intelligence services for restaurants. It could apply its data on food delivery demand to help kitchens to optimize prices, allocate staff, and improve menus.
To save its share price, Uber’s best bet is to find new streams of cash it doesn’t have to share with drivers or restaurants. It may still be years until self-driving vehicles arrive to rescue Uber from its tremendous costs.
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