about 4 years ago • 2 mins
When Uber reported its better-than-expected fourth-quarter results late on Thursday, the ride-hailing company revealed it would become profitable even faster after having tweaked its inner workings 🏎
Uber saw the bookings revenue from its different services grow 30% in the last quarter of 2019 compared to a year ago. Almost half that growth came just from Uber Eats: the food delivery service saw its quarterly revenue grow 70%, even as its losses ballooned by a similar amount. Overall, the company posted a smaller loss in the closing three months of 2019 than both investors’ expectations and the loss it made in the same period the previous year 👏
Consider Uber’s handbrake disengaged, because now it’s on a roll: the company also announced it’s aiming to become profitable by the end of 2020. That’s one year sooner than its previous plan of 2021 (we did the math), and might’ve come about as the company’s cost-cutting measures exceeded even its own expectations.
Revenue growth is great, sure, but what investors really seem to want these days is for that growth to be profitable. And those shifting priorities may be why Uber’s stock rose more than 8% on Friday after Uber moved its profitability goalposts. The company’s new CEO said he recognized that the era of “growth at all costs” is over, and he seems to be putting Uber’s money where his mouth is: he’s cut back on marketing expenses, laid off more than a thousand workers, and abandoned some unprofitable food delivery businesses.
Uber is already facing intense competition from other ride-hailing peers like Lyft, Bolt, and even self-driving service Waymo One. And now it has a new competitor in its biggest European market to worry about: India’s SoftBank-backed Ola announced plans to launch in London. As if Uber didn’t have enough problems in the English capital already…
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