Uber Eats In Focus As Inflation-hit Consumers Rethink Ordering In

An Uber Eats delivery bag is seen on a bicycle in Brooklyn, New York City, U.S., May 9, 2022. Reuters / ANDREW KELLY

The food-delivery business that kept Uber Technologies' earnings afloat during the peak of the pandemic is expected to show signs of strain in second-quarter results due on Tuesday as decades-high inflation crimps consumer spending.

The slowdown could dampen any boost from a rebound in Uber's mainstay ride-hailing business that has been benefiting from the reopening of offices and a surge in travel globally.

"Investors have written off food delivery as the next shoe to drop as consumers tighten up their wallets," Bernstein analyst Nikhil Devnani said, pointing to the dismal performance of Britain's Deliveroo.

GRAPHIC: Uber and Lyft's prices rise through the pandemic (

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THE CONTEXT

Deliveroo had cuts its annual revenue forecast last month amid a worsening cost of living crisis, prompting questions over the growth prospects of delivery firms.

While ride-sharing has staged a recovery this year, that could come under pressure from a possible driver shortage sparked by the surge in gasoline prices, MKM Partners analyst Rohit Kulkarni said.

Uber said last quarter it was not seeing the need to boost incentives to lure drivers, while rival Lyft was forced to invest more to ensure a steady supply of cab rides.

Lyft will report earnings on Thursday.

GRAPHIC:Uber and Lyft look to maintain adjusted EBITDA (