Uber officials are downplaying mergers and acquisitions following reports of Expedia deals

After it was reported that Uber was exploring an acquisition of Expedia Group, Uber's CEO and CFO did everything they could on Thursday to emphasize that organic growth is a priority and that acquisitions would face a high hurdle.

“Now to briefly touch on M&A, we remain extremely disciplined and I would like to emphasize that all opportunities are examined with a rigorous value creation mindset and Uber's M&A bar has never been higher,” said Prashanth Mahendra-Rajah, Uber CFO, in his statement remarks during the company's third quarter earnings release.

Mahendra-Rajah said: “The best deal is not having to do a deal at all,” citing previous comments from Uber’s CEO. The highest priorities are organic growth and returns on capital for investors.

The words “Expedia” and “travel” weren’t mentioned during the call with analysts, but one asked about the company’s thoughts on “partnering rather than buying your way into a new industry or market.”

“We will continue to evaluate mergers and acquisitions selectively, but the bar is really high and it has to provide both strategic value and financial value,” Mahendra-Rajah said.

CEO Dara Khosrowshahi took up the topic. “So when we look at partners versus acquisitions, etc., or whether we really want to actively enter an area, we ask ourselves: First, can we really enter an area with an appropriate level of focus? Is it essentially related to the core? And secondly, can we add value?” said Khosrowshahi.

Are ride-sharing services, which are part of Uber's core business along with food delivery and flight and hotel bookings, “significantly related”? This topic is certainly open to debate, and perhaps Uber has thoughts on the subject based on its testing of in-app travel features in the UK.

Khosrowshahi told analysts that Uber was actually interested in “neighborhoods.” The company had grocery delivery operations and was expanding into grocery delivery, for example, he said.

“Typically we look for behaviors that occur frequently, which means you get multiple interactions per month and can also benefit from our expertise in real-time local logistics,” he said.

The problem of common behaviors is an important issue for travel startups. Many travel startups failed after discovering that traveling is typically an infrequent behavior since most people only vacation a few times a year.

Therefore, traveling may not meet Uber's requirements if “multiple interactions per month” are sought.

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

The story continues