Growth is being given predominance over profit by Uber Technologies Inc. Chief Executive Officer Dara Khosrowshahi just like his predecessor. But because the ride-hailing service has reached a global scale, therefore it is finding it difficult to make growth gains.
A second-quarter loss of $891 million was recently reported by Uber. While the loss is 6 per cent better than what the company had notched up last year, the company took a step back compared to the quarter earlier when it had noted a rare profit which was driven by its sale of its foreign assets.
The second quarter also reported a slowdown in growth despite the company increasing spending in the same period. In the second quarter, the company reported a sale growth of 63 per cent at $2.8 billion compared to the same quarter last year. This figure was at 70 per cent – which showed a slowdown.
Despite being privately held, Uber does reveal some quarterly financial details for its large number of investors and the public. An initial public offering is being targeted by Uber for the second half of the current year but the company is yet to appoint a chief financial officer despite years of searching.
A food delivery business, logistics and autonomous-car technology programs are receiving large, undisclosed sums of money by Khosrowshahi. More than 10 percent of its gross bookings is being accounted for the food delivery business, Uber Eats, the San Francisco-based company has said earlier. But a slowdown in Uber’s main business may be masked by the growth in the food segment. Anything between $125 million to $200 million is being spent by Uber every quarter on self-driving cars, claimed a report published in the technology news site the Information. But the company has already got calls from investors to sell off that business.
This ride hailing company can already be called a global company even though Uber does see some growth opportunities for some geographic regions. Markets like China, Russia and Southeast Asia have already been exited by the company after selling its business to competitors. And the company would have made a loss in the first quarter of the current year without those sell offs.
Khosrowshahi is searching for new businesses. A start up that is in the business of renting electric bicycles was bought by Uber recently while it has also invested in another similar business which rents electric scooters in the last few months. Uber has also started working on its own scooter-rental business.
Scooters would be rolled out by the company in Santa Monica, California which would compete with its US rival Lyft Inc.
It has bene reported that over $11 billion has been expended by Uber since it was set up ion 2009. But the company is in no danger of running out of money because of its generous investors.
(Adapted from Bloomberg.com)