Uber Officials Downplay Mergers and Acquisitions After Expedia Deal Reports

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Uber officials have quashed speculation that the company is hungry for a major travel acquisition.

Dennis Schaal

The following reports Uber explored acquisition of Expedia Group Uber’s CEO and CFO did their best Thursday to emphasize that organic growth is the priority and that the bar for acquisitions will be high.

Prashanth Mahendra-Rajah, Uber CFO, said in his report: “Now quickly diving into M&A, we remain extraordinarily disciplined and ensure all opportunities are evaluated with a solid value creation mindset and Uber’s M&A bar has never been higher.” “I want to emphasize that it is not.” Remarks during the company’s third-quarter earnings call.

“The best deal is not having to make a deal at all,” Mahendra-Rajah said, referencing what the Uber CEO has stated in the past. The top priorities are organic growth and return on capital for investors, he said.

The words “Expedia” and “travel” were not mentioned in the call with analysts, but one person asked for the company’s thoughts on “acquiring or partnering with to enter a new vertical or new market.”

“So we will continue to evaluate mergers and acquisitions selectively, but it’s a really high bar and it will have to be both strategically value enhancing and financially enhancing,” Mahendra-Rajah said.

Khosrowshahi Talks ‘Focus’ and ‘Frequency’

CEO Dara Khosrowshahi addressed the issue. “So generally when we look at partners or acquisitions etc. or whether we want to actively enter an area, we actually ask ourselves the question: First, can we really go into an area with the appropriate focus? Is it fundamentally connected to the core? And secondly, can we add value?” ” Khosrowshahi said.

Is it “significantly related” to ridesharing, food delivery, flights and hotel reservations, which are part of Uber’s core business? This topic is certainly debatable, and perhaps Uber has thoughts on the subject based on their testing. In-app travel features in the UK.

Khosrowshahi told analysts Uber is really interested in “neighborhoods.” He said the company does food delivery and has expanded into groceries, for example.

“We often look for common behaviors, which means you can get multiple interactions per month and also benefit from our expertise in real-time local logistics,” he said.

The issue of frequent behavior has been a major problem for travel startups. Most travel ventures fail after discovering that travel is a rare act as people mostly vacation only a few times a year.

So if travel is looking for “more than one interaction per month,” it may not meet Uber’s requirements.

Khosrowshahi recalled how the company organically built its food delivery service, Uber Eats.

“So we’re building it organically as part of the DNA of this company,” he said.

However, Uber CEO does not rule out acquisitions.

“Then if we see something really interesting, we’ll look at acquisitions,” Khosrowshahi said. “But again, as Prashanth said, we’re going to be very disciplined about these acquisitions because the bar for ROI is pretty high in our store right now.”

So never say never.