Tech

Uber CEO reveals it considered buying food delivery app Caviar before rival DoorDash did

Key Points
  • Acquiring premium online food delivery service Caviar would not have been a good fit for Uber Eats, says Uber CEO Dara Khosrowshahi.
  • Last week, Square announced an agreement to sell Caviar to Uber Eats' formidable rival DoorDash for $410 million.
  • Khosrowshahi says Uber Eats will focus on organic growth rather than acquisitions.
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Uber CEO Dara Khosrowshahi told CNBC on Friday that the ride-hailing, freight and delivery giant considered a deal with on-demand food delivery service Caviar but decided to pass.

"We took a look at Caviar. It's a great brand," Khosrowshahi said in a "Squawk on the Street" interview, as Uber shares were sinking after disappointing second-quarter results. "It wasn't the right deal for us."

Khosrowshahi said Uber's food delivery service, Uber Eats, will focus on organic growth rather than acquisitions.

On Aug 1, Square announced an agreement to sell Caviar to Uber Eats' formidable rival DoorDash for $410 million. Square had bought Caviar for just over $44 million in 2014. The Caviar service specializes in premium restaurants.

While declining to comment further on Caviar, Khosrowshahi did say that he sees food delivery as a real battle this year and next. "The Eats market continues to be very competitive."

Khosrowshahi said that if Uber were to seek any acquisitions, he's not worried. "We're Uber, everyone wants to talk to us."

After the Wall Street close Thursday, Uber posted a much wider-than-expected second-quarter loss of $4.72 per share. Revenue of $3.17 billion was also missed analyst estimates.

Uber's core ride-hailing business saw better-than-expected gross bookings for the quarter, while the newer Uber Eats unit's gross bookings fell short of forecasts.

"So with rides, I say the competitive environment is stable and getting better," Khosrowshahi said during Friday's CNBC interview. "We see a lot of competition with Eats," he reiterated.

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Key Points
  • SoftBank's Vision Fund 2 is poised to invest in companies that could become competitors to Uber. 
  • "We are their single largest investment on a global basis, so I think our interests and [the SoftBank CEO]'s interests are very much aligned," Uber CEO Dara Khosrowshahi says.
  • Uber missed analyst expectations on the top and bottom lines in its first quarterly report since its initial public offering, sending its shares tumbling.