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.”