Uber says it could become profitable by the end of the year, even as it reported another quarter of heavy losses in 2019, according to The Verge.
The ride-hailing firm posted losses throughout 2019. Last week, they reported $1.1 billion in fourth-quarter losses, down from second-quarter losses that reached $5.2 billion. The company says it lost a grand total of $8.5 billion last year.
Much of the losses represented investment into the Uber Eats food delivery service, which saw steady growth with a 71 percent increase in gross bookings, but lost over 60 cents on each dollar of revenue last year.
Last year’s fourth quarter did see overall revenue increase 37 percent, and rides on the platform increased 28 percent. The core ride-sharing element of the business did manage to turn a profit in the last quarter.
Uber has struggled since it went public last year, and until now, the company wasn’t projecting profitability until 2021. After Uber announced the new projections, its shares jumped 6.8 percent on Friday, suggesting that investors find the plan credible.
Uber chief Dara Khosrowshahi says the heavy investment into Uber Eats is expected to decline after March, when the company will begin to focus resources on markets where it can become a top player. Last month, Uber sold its food delivery service in India to a local rival.
The company also laid off 1,000 workers last year in a restructuring effort.
“2019 was a transformational year for Uber and I’m gratified by our progress, steadily delivering against the commitments we’ve made to our shareholders on our path to profitability,” Khosrowshahi said in a press release.
“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”.
However, Uber is also facing regulatory challenges in some of its top markets. London authorities revoked the company’s license to operate based on safety concerns late last year, and if it loses its appeal, Uber won’t be able to operate there in the future. Closer to home in California, a new gig work law is limiting Uber’s ability to classify its drivers as independent contractors.
The company says it has $11.3 billion in cash and short-term investments, which would allow it to continue operating with the recent rate of losses for another three years.
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