- The global ride-hailing market is expected to grow at a 16.3% CAGR during 2026–2031, reaching USD392bn, supported by rising urban mobility and delivery demand
- Uber’s acquisition of Delivery Hero’s food delivery business reinforces the importance of scale, capital discipline, and consolidation in improving long-term industry profitability
- Uber, Lyft, and Grab all delivered strong 1Q26 profitability, driven by operating leverage, healthy demand growth, and continued execution on cost efficiency
- Uber's larger economic stake in Grab and its non-compete obligations reduce the likelihood of an aggressive Southeast Asia re-entry, supporting rational competition and continued margin expansion for Grab
- We prefer dominant platforms with leading market share, sustainable profitability, and strong execution as industry consolidation increasingly favours scaled operators
Related insights
The Uber–Delivery Hero deal highlights the importance of on-the ground density and scale in food delivery. Uber's planned USD14.8bn acquisition of ~80% of Delivery Hero (DHER) expands its footprint to 99 markets. However, DHER's acquired assets generate only a 2.6% EBITDA margin on GMV compared to Uber's more mature delivery economics. This serves as a reminder that in this hyper-local business, density and execution on the ground, rather than market count, determine profitability. Notably, SSW Partners, a financial sponsor, is separately taking DHER's remaining 14 markets private. We view these two outcomes as evidence that the industry is bifurcating. Platforms with genuine, dominant local density (Uber dominates on-demand market share in the US, Canada, UK, Australia; DoorDash in the US, where it holds >65% delivery share) can defend pricing and reinvest in growth. In contrast, sponsor-owned sub-scale players such as those in SSW's carve-out, lack the capacity to compete on anything but price. The implication for investors is that, as more of the delivery "long tail" is absorbed into either camp, promotional intensity should fall structurally, giving industry margins room to expand toward Uber's demonstrated ~4%+ Gross Bookings Value (GBV) delivery margin. This reinforces our preference for platforms with dominant, defensible local density. That said, we caution against overstating the transaction's direct relevance to Southeast Asia. Uber's stated priority markets, the Middle East, South Korea, and Argentina exclude the region, and Delivery Hero's Foodpanda operations remain subscale relative to Grab's market-leading position, with ~70% mobility share and 55% food delivery share.
US and Southeast Asian ride-hailing platforms continued to improve profitability in 2Q26. Uber led in scale and profitability, reporting 2Q26 Adjusted EBITDA of USD2.82bn (+33% y/y, ~2% above consensus), driven by continued operating leverage across Mobility and Delivery, coupled with AI-related productivity gains. Lyft posted 2Q26 Adjusted EBITDA of USD177mn (+37% y/y, beating consensus), supported by 23% Gross Bookings growth and double-digit active rider expansion (+17% y/y to a record 30.5mn). Grab delivered 2Q26 Adjusted EBITDA of USD168mn (+54% y/y, ~5% above consensus), driven by lower-than-expected corporate costs and a narrower Financial Services loss, Grab also raised FY26F Adjusted EBITDA guidance to USD720–740mn (44–48% y/y growth, up from USD700–720mn).
Southeast Asia impact remains limited as Uber focuses on global consolidation. More importantly, Uber has a financial disincentive to compete aggressively against Grab in Southeast Asia as its ~13.5% economic stake in Grab is worth ~USD1.6bn, more than double the value of Foodpanda’s Southeast Asian business. This is reinforced by the fact that Uber is barred from competing with Grab in its core markets for 12 months even if it fully exits its stake. This raises the possibility of regulatory rejection of the deal or Uber may end up winding down Foodpanda's Southeast Asian operations if it gets the approval. We continue to view Uber's Grab stake as a passive investment rather than a strategic lever.
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