Uber Eats Exits Bangladesh and Online Food Delivery Thesis Followup

On May 19th, Uber Eats, Uber’s on-demand food delivery business, announced that it is going to discontinue operations in Bangladesh from June 2nd, 2020. The decision, which coincided with Uber’s decision to trim its operation globally with major layoffs amid the coronavirus pandemic, can easily be attributed to the fallout from the pandemic. Uber’s ride-hailing business remains shutdown. The company has been making difficult decisions such as laying off a large number of people across verticals across markets. 

However, Uber Eats is a different story. The on-demand food delivery business of the ride-hailing giant has seen meaningful growth in some markets including the US during the pandemic to the extent that Uber is rumored to be in a discussion to take over another food delivery giant Grubhub in the US. To clarify, on-demand food delivery is not doing that fantastic in all markets though.

Uber Eats has made an announcement that says it aims to focus “our energy and resources on our top Eats markets around the world” as its reason for shutting Uber Eats in Bangladesh. That’s a quite straight forward announcement that leaves little room for speculation and it does make perfect sense. It is true that pandemic has strangled Uber’s main business and the company is in no position to take things lightly. But it would be lazy to attribute Uber Eats decision to exit the Bangladesh market within a year of its launch to only pandemic fallout. There is more to it. 

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