Uber notches US$50B in total annual bookings

But profit remains elusive ahead of IPO

SA N FR A NCISCO • Uber Technologies Inc. had US$50 billion in total bookings for its ride- service and fooddelivery businesses last year, a testament to the size and global reach of the company as it prepares to woo investors in one of the biggest public stock listings to date.

But figures released by the company on Friday showed revenue grew just two per cent in the fourth quarter, a sign that Uber continues to heavily subsidize rides in competitive markets, raising questions about its future growth prospects.

Uber’s full- year revenue for 2018 was US$11.3 billion, up 43 per cent from the prior year. Its losses before taxes, depreciation and other expenses were US$1.8 billion, an improvement over the US$2.2-billion loss posted in 2017.

Uber highlighted the annual bookings figure, which was up 45 per cent over 2017, in its release on Friday of a smattering of selected figures for its fourth- quarter and full-year results, a practice it has used for the last several quarters as it anticipated going public. The fullyear figures are particularly important to show potential investors the trajectory of the business, as opposed to Uber’s more erratic quarterly results.

Uber in December filed confidentially for an initial public offering, which may come as early as the second quarter of this year. It is racing neck- and- neck with rival Lyft to become the first ride-hailing IPO.

“Last year was our strongest yet, and Q4 set another record,” Uber chief financial officer Nelson Chai said in a statement.

Uber said gross bookings for the fourth quarter were a record US$14.2 billion, up 11 per cent from the prior quarter. That marks an improvement after bookings growth slowed to just single- digit percentages throughout much of last year.

Uber ’s revenue in the four th quar ter reached US$3 billion, up two per cent from the third quarter and a 24-per-cent increase over the previous year.

The food-delivery service, Uber Eats, accounts for more than US$2.5 billion in bookings quarterly, according to a person with knowledge of the matter. Uber has trumpeted Uber Eats as the largest online food delivery business outside of China.

Uber must convince public market investors that its market share, growth trajectory, global scale and diversity of businesses make it a compelling investment, despite its enormous losses.

“Uber needs to show it can control costs and can make money, basically provide a strong argument that its business model is not broken and that it can achieve and sustain profitability despite issues with drivers, customers and politicians,” said David Brophy, professor of finance at the University of Michigan’s Ross School of Business.

Ongoing intense competition with ride-hailing foes across the globe has kept Uber in the red. Rivalries in India with ride service Ola, in Latin America with Didi Chuxing and in the Middle East with Careem have pressured Uber to lower prices,