Uber's (UBER  ) finished 5.5% lower following its beat of second-quarter expectations for revenue but missed on earnings. Overall, the ride-sharing business was down 73% compared to the same quarter last year. However, the company was able to somewhat make up this shortfall through Uber Eats which saw a 113% increase.

Inside the Numbers

Overall, Uber reported a loss of $1.02 per share which was more than expectations of $0.86 per share. Revenue was higher than expectations at $2.24 billion vs expectations of $2.16 billion. In terms of the company's two major units - gross bookings for ride-sharing was came in at $3.04 billion which was below expectations of $3.47 billion. Food delivery beat at $6.96 billion against expectations of $6.57 billion.

Of course, this basically reflects the post-coronavirus economy. With tourism, travel, and nightlife basically shut down, there's little reason to take an Uber. Additionally, anyone who wants to minimize exposure is going to avoid sitting in a stranger's car. In contrast, many restaurants are only doing takeout, and in-person, indoor dining seems to be correlated with rising case counts, so food-delivery is exploding.

Uber Eats operators the same basic, business as Uber, where its delivery drivers are independent contractors, and Uber basically serves as an intermediary and takes a cut of each delivery. It's expanding this part of the business as it bought PostMates a couple of months ago. Uber's exposure to food-delivery is a blessing as it's stock is 5% higher year-to-date, while Lyft (LYFT  ) is lower by 30%. Uber has also introduced Uber Connect that allows people and businesses to send small packages via Uber drives to local destinations.

The company didn't give much forward guidance due to uncertainty from the pandemic, however, it did say that while bookings were down sharply in the US, they had begun to recover in parts of Europe and Asia. In these places, they were lower by 30 to 40%, while US markets were down between 70 and 85%. In part, this is a reflection that case counts are significantly down in those parts of the world, while the US is still in the middle of the fight.

Stock Price Impact

Uber IPO'd in May 2019 at $45. Currently, it's 27% lower. In some ways, it's a win, because the pandemic was probably the worst thing that could happen to the company's ride-sharing business. Its primary competitor, Lyft is down 70% from its IPO as are other stocks connected to the travel industry over the same time period.

The growth of Uber Eats is one factor in its relative strength. Additionally, when things normalize, it will be in the best position to keep growing and win market share from Lyft and other ride-sharing competitors in foreign markets due to its recent acquisitions, size, and $8 billion in cash.

Another major threat to the company is governments forcing Uber to treat its drivers like employees rather than independent contractors. For example, California and Pennsylvania have ruled that drivers are employees, so Uber would be on the book for paying taxes and unemployment insurance for these workers. Of course, this would eat into margins and affect Uber's business model, so the company is vigorously contesting these decisions.