Uber Sees 4% Share Price Hike Following Latest Financial Statement
Despite the fact that Uber lost its London licence in the past few months, the company looks set to move into profitability in 2020. Uber shares started trading on the New York Exchange in 2019, however, prices have fallen dramatically since the public offering due to concerns about business losses.
Uber’s Future Profitability
Despite the fact that Uber rides booked via the brand’s platform rose by 28% in the final quarter of 2019, the company posted losses of £851mn. The increase in rides generated a total US revenue hike of $4bn, but the brand states that spending on the Uber Eats business has impacted on bottom-line profitability.
Dara Khosrowshahi, Uber CEO, said:
“We recognize that the era of growth at all costs is over. In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win.”
The brand’s ride-hail service is its core offering, and its London licence was removed following publication of issues surrounding safety.
The total losses posted by Uber for 2019 were $8bn, however, the global business grew by 32% to achieve revenues totalling $14.1bn.
Uber sold off its loss-making food delivery business in India to the popular startup Zomato, although the brand has retained a share of the Zomato business. Readers will recollect that we posted an article about the success of the India-based ride-hail business Ola and its UK launch some time back.
Ola is planning further developments to its UK ride-hail service in 2020; including operating in the London area.
Alyssa Altman, the senior analyst at Publicis Sapient, commented:
“Uber’s latest attempts to shed money-losing businesses, while promising, don’t guarantee it will dig itself out of the financial grave it dug for itself.”
Finally, Uber stated that over 111mn customers were active on its platform in the final quarter of 2019, however, it does not plan to invest significant sums in the Uber Eats brand after March 2020.
Brand efforts and investments will focus instead on core business sectors where it can achieve its aims of being the top global player.