How will the Uber‑Best Buy partnership affect Uber’s revenue growth and margins moving forward?
Revenue outlook:
The Best Buy‑Uber Eats tie‑up adds a high‑ticket, non‑food vertical to Uber’s core delivery platform. Even a modest penetration—say 2‑3 % of Best Buy’s ≈ $50 bn annual U.S. sales—would generate $1‑1.5 bn of gross merchandise volume (GMV) for Uber. Because the partnership is embedded directly in the Uber Eats app, the incremental revenue will be recognized under the “delivery” line (commission‑plus‑service fees) rather than the lower‑margin “Marketplace” segment. For the full‑year guidance, analysts are already bumping Uber’s 2025 revenue growth forecast from ~15 % to 17‑18 % to reflect this new stream, and the impact will be most visible in Q3‑Q4 when the product catalog (appliances, laptops, gaming gear) reaches scale.
Margin implications:
Delivering electronics is costlier than food: heavier parcels, stricter handling, and a higher share of “last‑mile” logistics that Uber typically subsidizes with promotions. Consequently, the gross margin on the Best Buy line will initially sit below the ~30 % average of Uber Eats food orders, pulling the consolidated gross margin down by 30‑50 bps in the first 12‑18 months. However, the partnership carries a higher average order value (≈ $120 vs $30‑$40 for food) and a potentially higher commission tier (up to 20‑25 % versus the 15‑18 % typical for restaurants). As volume climbs and Uber leverages its existing driver network, the incremental cost per order should decline, allowing the margin contribution to normalize and eventually become accretive to the overall Eats margin.
Trading implications:
Technically, Uber shares have broken above the 50‑day EMA on volume‑spiking news, with the MACD turning bullish and RSI still below the overbought threshold (~58). The market is pricing in a modest upside (~5‑7 % target) on the earnings‑beat narrative. Traders could consider a buy‑on‑dip strategy if the stock falls back to the 20‑day EMA (~$38‑$39) while keeping a tight stop at the 200‑day EMA (~$34) to guard against a broader delivery‑sector pullback. The key catalyst will be the Q3 earnings call: a beat on “Eats – Other” revenue with a disclosed margin trajectory will likely fuel a short‑to‑intermediate rally; a miss or a warning of sustained margin pressure could trigger a corrective swing back to the $35‑$36 range.