Date
12 December 2018
Ride-hailing services giant Uber remains in the red as it continues to invest ahead of a planned 2019 IPO. Photo: Reuters
Ride-hailing services giant Uber remains in the red as it continues to invest ahead of a planned 2019 IPO. Photo: Reuters

Uber posts US$1 bln Q3 loss as bookings growth slows

Uber Technologies posted a more than US$1 billion loss in the three months to September as the company continued to invest in new business segments such as freight and food delivery and electric bikes and scooters. 

The ride-hailing and delivery services firm on Wednesday reported that it lost US$1.07 billion in the third quarter, a 20 percent increase from the previous quarter but down 27 percent from a year ago, Reuters reports.

Gross bookings rose 6 percent in the three months, the third quarter in a row that growth has remained in the single digits after double-digit growth for all of last year.

Adjusted loss before interest, taxes, depreciation and amortization was US$592 million, down from US$614 million in the previous quarter and US$1.02 billion a year ago.

The San Francisco-based firm is seeking to expand in freight hauling, food delivery and electric bikes and scooters as growth in its now decade-old ride-hailing business dwindles.

The company, valued at US$76 billion, needs to convince investors that it can still grow enough to become profitable as it prepares for an initial public offering next year.

“We had another strong quarter for a business of our size and global scope,” said Nelson Chai, Uber’s chief financial officer.

The executive emphasized the “high-potential markets in India and the Middle East where we continue to solidify our leadership position.”

Uber’s gross bookings were US$12.7 billion, up 6 percent from the previous quarter and up 41 percent from a year ago.

In late 2016, the firm’s quarterly bookings growth approached 30 percent, and in early 2017 it still sustained double-digit growth quarter-over-quarter. At the start of this year, however, bookings growth slid into the single digits.

Revenue for the quarter was US$2.95 billion, a 5 percent boost from the previous quarter and up 38 percent from a year ago. That trailed the second-quarter year-over-year revenue increase of 63 percent.

As a private company, Uber is not required to publicly disclose financials, but last year started releasing selected figures.

Since CEO Dara Khosrowshahi took the helm more than a year ago, Uber has retreated from foreign markets where it had suffered heavy losses and shuttered certain pricey ventures including self-driving trucks.

But Khosrowshahi has plowed the savings back into its freight-hauling, food-delivery, and electric scooter and bikes businesses.

An investment by SoftBank that closed in January, which gave the Japanese investor a 15 percent stake in Uber, included a provision that requires Uber to file for an IPO by Sept. 30 of next year, or the company risks allowing restrictions on shareholder stock transfers to expire.

Khosrowshahi has focused on growing Uber Eats, which took in US$2.1 billion in booking revenue, marking a 150 percent jump over last year and about 17 percent of total bookings.

Uber has also pledged to double its investment over the next year in Freight, a brokerage service set up in May 2017 for truck drivers and fleet managers looking for cargo to haul. The business is doubling the number of loads it connects with truckers every quarter, Uber said.

Uber is considering moving its public debut up from the second half of 2019 to the first half, given concerns about a market downturn and an expected IPO from its chief US rival Lyft, according to Reuters sources.

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CG/RC

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