Uber has come a long way since its early days as a simple ride-hailing app. Today, it’s exploring a significant move: a potential acquisition of the $20 billion travel-booking giant Expedia.
This could be Uber’s largest deal ever as it aims to expand beyond transport and food delivery into the world of travel. Such a bold move is Uber’s latest effort to become a ‘super app,’ like China’s WeChat, offering everything from booking taxis to flights in one place. But what’s in it for Uber – and what could this mean for travel and tech in general?
Why the Expedia Deal Caught Uber’s Eye
A key figure in this potential deal is Uber’s CEO, Dara Khosrowshahi, who has deep ties to Expedia. As Expedia’s former CEO and a current board member, Khosrowshahi knows the business inside out. Adding Expedia’s vast booking technology and brand to Uber’s portfolio could help the ride-hailing company boost its reach. This isn’t a minor investment but an alignment that makes sense if Uber truly wants to offer a seamless, all-in-one platform for consumers.
This takeover idea supposedly didn’t come directly from Uber but was suggested by a third party, sparking initial discussions with advisors. While there’s not yet believed to be a formal proposal, Uber’s leadership could potentially see a chance to combine its growth in mobility with a broader expansion in travel services. However, it’s early days, and as one insider put it, there’s a real chance the deal may not materialise.
The Financial Muscle Behind Uber’s Expansion
Over the past year, Uber’s stock has surged by 85%, pushing its market capitalisation to a robust $173 billion. This growth is partly due to its increasingly diversified services – from food delivery to advertising and logistics. In February, Uber achieved its first operating profitability, a milestone boosting investor confidence. Chief Financial Officer Prashanth Mahendra-Rajah clarified that Uber’s top priority is investing in growth through acquisitions. However, with the cost of a potential Expedia takeover, Uber must carefully assess if the move aligns with its growth targets without compromising its investment-grade credit rating, which it secured only recently.
Plan Insurance can provide bespoke taxi insurance quotes for all UK drivers. Just fill in our short online questionnaire, and our professional brokers will be in contact to arrange your insurance.
The Growing ‘Super App’ Strategy
Uber’s ambition to create a ‘super app’ mirrors similar platforms in Asia, where consumers can access a range of services under one digital roof. Uber has already ventured into diverse areas, such as corporate logistics and flight bookings. Adding Expedia would not only give Uber access to the travel sector’s substantial revenue. This means you could book a ride, flight, hotel, and maybe even dinner reservations through one platform. Imagine planning a holiday in seconds rather than using several apps – this is where Uber seems to be heading.
What’s the Impact on the Market?
If this acquisition goes through, it could shake up the travel and tech markets. Expedia saw a surge in revenue to $12.8 billion in 2023 as global tourism rebounded post-pandemic. However, with travel demand cooling, Expedia faces some uncertainties. For Uber, a successful acquisition could provide a fresh revenue stream and, for consumers, a new, streamlined way to manage travel and transport in one place.
That said, Uber’s previous acquisitions haven’t been without challenges. Integrating Postmates, Drizly, and Careem was a learning experience, and a deal with Expedia could present even more complexity. But with Khosrowshahi’s expertise in the travel industry, Uber may have the leadership needed to make it work.
What’s Next for Uber?
While this potential acquisition is still uncertain, it highlights Uber’s commitment to diversification. The company has stakes in autonomous driving (via partnerships with Google’s Waymo and GM’s Cruise) and continues to explore new ways to deliver value. As Uber broadens its services, the prospect of an all-in-one super app doesn’t seem that far off.
Find out why 96% of our customers have rated us 4 stars or higher, by reading our reviews on Feefo.