Uber's Quarterly Losses Reach $1.1 Billion in Third Quarter
Uber’s in a bit of trouble after quarterly losses surged to $1.1 billion dollars. The ride-hailing giant has watched its sales growth dwindle this year, despite an expensive attempt to promote its global expansion.
It’s not the kind of thing you want to see from a company at the forefront of “revolutionizing” the automotive sector, especially since so many automakers seem keen on copying aspects of its business model.
Still planning on an initial public offering in 2019, Uber really could have used good news. However, according to figures released on Wednesday, revenue growth of 38 percent in the third quarter half of what it was half a year ago. It’s also still largely unprofitable, but that has a lot to do with what’s on its plate right now.
The ride-hailing company is currently working toward developing a traffic analytics program, a transport logistics management system, food delivery services, autonomous vehicles, and electric scooter rentals. That’s in addition to spending a fortune in the hopes it can break into new markets across the globe.
According to Bloomberg, Uber released a limited set of financial figures on Wednesday, offering a glimpse into its food delivery business for the first time. Uber Eats generated $2.1 billion in gross bookings, representing 17 percent of Uber’s gross bookings last quarter. However, its core ride-hailing business is in trouble and side projects aren’t making up the difference (due to the sizable investments needed just to get the ball rolling).
On stage at the Wall Street Journal technology conference on Tuesday, Chief Executive Officer Dara Khosrowshahi defended the company’s ability to achieve profitability. He argued that some ride-hailing markets generate profit for Uber after accounting for local operations teams, drivers and other regional expenses. In the U.S., however, the business is not profitable even by this lower standard. “In the U.S., which is our largest market, we’re in a big battle” with Lyft Inc., he said.
Khosrowshahi has said publicly that Uber is targeting a public offering in the second half of 2019. Privately, he’s told investors that he’s aiming for the first half of the year, people familiar with the matter have told Bloomberg. Lyft is also considering an IPO in the first half of next year, people have told Bloomberg.
Uber was holding on to $6.55 billion in cash at the end of the quarter, which does not include the $500 million it recently raised from Toyota Motor Corp. and its $2 billion debt offering. It’s also a little unfair to call its current losses a backslide. While the company saw $2.6 billion in revenue in the first quarter of 2018, up from $2.4 billion in the previous quarter, that was largely due to merging businesses in Russia and Southeast Asia with local competitors.
“We had another strong quarter for a business of our size and global scope,” said Chief Financial Officer Nelson Chai. “As we look ahead to an IPO and beyond, we are investing in future growth across our platform, including in food, freight, electric bikes and scooters, and high-potential markets in India and the Middle East where we continue to solidify our leadership position.”
[Image: Sandeepnewstyle/ Wikimedia Commons ( CC BY-SA 4.0)]
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Tassos GM, especially under the sorry reign of socially promoted nobody Mary Barra (who would not have a chance in hell being appointed the CEO if she was a MALE) has done far dumber and sillier things than that, wasting BILLIONS on 'cruise' and expecting it to make it $50 billion, remember? THey do not mention the name much these days, the clowns at GM, do they?
- MaintenanceCosts I notice that the pictures don't show the dash or the door cards, two places where you'd be most likely to notice interior disintegration on a VW of this vintage.Looks nice on the outside but I wouldn't touch it.
- SilverHawk At least in the short term, this is simply going to cause more anxiety among the more technology shy consumers looking to buy a new vehicle. Especially when this is not being done for the benefit of the vehicle owner, but for the convenience of GM's marketing department. Personal data security is an extremely important issue in today's world.
- Ajla I don't think I'd be able to part with something I kept for 23 years. Especially as the only owner.
- MaintenanceCosts What now?Lack of CarPlay would be disqualifying for me, and as a current GM EV owner I was a reasonably likely future GM EV customer. Not good at all.
UBER has a lot on its plate, but honestly how can they continue to support their supposed market value for an IPO next year? Yet at the same time, GM, Ford, and the like are trying to position themselves as technology companies instead of auto manufacturers. Reminds me of Spotify, which is now trading for less than the company was valued on the opening day of its IPO. They have to pay between 60-65% of top-line revenue to secure blanket licenses from the major labels. So they don’t really own anything, kind of like UBER. Don’t get me started on how much money actually goes to the content creators. Netflix, on the other hand, does own most of their content, but even they are down 20% this month. They recently did a $2 billion raise for more content. I’m not a Luddite, but I don’t think technology is always going to make a stronger bottom line.
This is all just the TSLA model, which as I post this comment today, is at: 361.45 USD +7.14 (up 2.02%). Keep pushing the vaporware, and those hungry for the next big win will keep paying into the scheme.