On August 17, Serve Robotics (NASDAQ:SERV) said it is partnering with Grubhub to fulfill orders on the food delivery platform using its sidewalk robots. The deal lands just days after the company’s years-long tie-up with Uber Eats fell apart, and it marks Serve’s attempt to plug that gap with a new revenue channel. The Grubhub rollout starts in Chicago, Los Angeles and Alexandria. For a company that just watched its biggest guidance number get cut in half, the timing could not matter more.
Bull Case: Chasing New Delivery Roads
Serve’s pitch to Grubhub arrives alongside a broader push to diversify beyond the Uber relationship that once anchored its business. The company also launched with DoorDash in San Jose, California, and Washington, D.C., its seventh and eighth major US markets, spreading delivery volume across more partners rather than leaning on one. CEO Ali Kashani told Reuters he expects the lost Uber volume to be more than replaced over time through Grubhub and other initiatives, calling it a path to faster growth.
The economics behind that bet are straightforward. Serve says the median food delivery trip covers about 2.5 miles and currently costs $8 to $10 with a human driver, a cost the company believes its Gen 3 robots can cut to roughly $1 per order by removing driver wages and running up to 14 hours on a single charge. Those robots operate at a 99.8% order completion rate across eight major cities. Serve is also rolling out smaller “micro depot” sites in Miami for robot charging and dispatch, a cheaper and faster way to enter new markets than building a full-scale facility. And its acquisition of Diligent Robotics has pushed the next generation of Moxi hospital robots into rollout, extending Serve’s footprint to 44 cities across 14 states and opening a healthcare revenue stream separate from food delivery.
Bear Case: A Forecast Comes Undone
This expansion follows Serve Robotics’ decision not to renew its delivery agreement with Uber Eats upon its expiration. Uber exited its stake in Serve, and the company said this month it has no current plans to renew the Uber Eats deal when it lapses early next year, pointing to falling order volumes and differing views between the two companies. That loss shows up starkly in the numbers. Serve’s second-quarter revenue jumped 400% year over year to $3.2 million, boosted mainly by the addition of Diligent’s revenue rather than organic delivery growth, yet management slashed its full-year 2026 revenue forecast from $26 million to just $9 million to $10 million.
With $6.2 million already booked in the first half, that guidance implies second-half revenue could fall to as little as $2.8 million. The company also lost more than $113 million on a GAAP basis in the first half of the year, a pace its $240 million cash pile can only support for so long before Serve needs to raise money or take on debt, diluting existing shareholders in the process. Layered on top of a shrinking growth outlook, the stock still trades at a price-to-sales ratio of 46, roughly seven times higher than the Nasdaq-100’s 6.3, leaving little room for error if the Grubhub bet takes time to pay off.
The Skeptics Are Circling
Hedge fund interest in Serve ticked up to 14 funds holding a position, from 13 the prior quarter, a modest sign of accumulating conviction. That sits in tension with a short interest of 31.93% of the float, a level that points to heavy organized skepticism about where the stock goes next as market participants weigh potential revenue contributions from Grubhub and DoorDash against lowered full-year guidance.
Robots On A Tightrope
To offset the non-renewal of its Uber Eats partnership, Serve Robotics is diversifying into additional delivery platforms, expanding geographic coverage, and integrating hospital robotics operations. The Grubhub and DoorDash expansions show the company can find new doors to walk through, and the underlying robot economics still argue for a large addressable market over time. But the guidance cut and the cash burn are not small print; they are the current story. The market’s split verdict, rising fund interest against heavy short positioning, captures that unresolved tension between opportunity and risk. If Grubhub and DoorDash volume ramps quickly enough to outpace what Uber took with it, this expansion pays off, but a cash pile that shrinks faster than revenue grows would leave little room to find out.
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