Uber re­veals strong growth, huge losses ahead of IPO

Sun.Star Pampanga - - TECHNEWS! -

SAN FRAN­CISCO (AP) — Uber is pro­vid­ing a look un­der the hood of its business in the lead-up to its hotly an­tic­i­pated de­but on the stock mar­ket, re­veal­ing strong growth but an on­go­ing struggle to over­come huge losses and re­pair its rep­u­ta­tion.

Doc­u­ments re­leased 2017, and a gi­ant leap Thurs­day of­fered the from $495 mil­lion in most de­tailed view of the 2014. world’s largest ride-hail­ing The com­pany posted ser­vice since its in­cep­tion a profit of $997 mil­lion a decade ago. last year, but that

The mas­sive fil­ing doesn’t mean its ride­hail­ing shows Uber has been ser­vice sud­denly gen­er­at­ing the ro­bust started to make money rev­enue growth that en­tices — far from it. The positive in­vestors, but also re­sult stemmed from racked up nearly $8 bil­lion a wind­fall that Uber gen­er­ated in losses over its 10 from the sale of years in ex­is­tence, which its op­er­a­tions in Rus­sia mir­rors the same trend and South­east Asia. The chal­leng­ing Lyft, Uber’s com­pany said it sus­tained main ri­val in the U.S. an op­er­at­ing loss

Uber’s rev­enue to­taled of $3 bil­lion. $11.3 bil­lion in The San Fran­cisco 2018, a 42% in­crease com­pany also dis­closed from $7.9 bil­lion in a le­gal cloud hang­ing the ride-hail­ing ser­vice’s rep­u­ta­tion while try­ing to make the case that the com­pany has re­ha­bil­i­tated it­self since he took over 18 months ago.

He struck his note of con­tri­tion and op­ti­mism in a let­ter in­cluded in the fed­eral doc­u­ments.

“Some of the at­tributes that made Uber a wildly suc­cess­ful startup — a fierce sense of en­trepreneuri­al­ism, our will­ing­ness to take risks that oth­ers might not, and that fa­mous Uber hus­tle — led to mis­steps along the way,” Khos­row­shahi wrote, clos­ing his let­ter by as­sur­ing he will run Uber with integrity.

Reach­ing prof­itabil­ity has proven to be a chal­lenge for both Uber and Lyft. Pay­ing driv­ers is a huge ex­pense, and Uber’s fierce com­pe­ti­tion with Lyft for cus­tomers has led both companies to of­fer rides below cost. Driv­ers for both companies com­plain about de­clin­ing earn­ings, and they can eas­ily switch be­tween plat­forms, mak­ing it difficult for ei­ther com­pany to fur­ther re­duce driver costs and keep fares cheap for pas­sen­ger s.

Uber said it plans to give bonuses to qual­i­fied driv­ers and is set­ting aside an undis­closed por­tion of its stock for driv­ers to buy.

Its un­prof­itable his­tory may force Uber to even­tu­ally raise its ride­hail­ing prices un­less it can re­duce its costs by shift­ing to driver­less cars or ex­pand into other mar­kets and lines of business.

But Uber’s op­er­at­ing losses de­clined from $4 bil­lion in 2017 to $3 bil­lion in 2018, in­di­cat­ing it could be head­ing in the right di­rec­tion.

“They’re show­ing that they’re ca­pa­ble of con­trol­ling their costs, which has been a con­cern of ride shar­ing companies in gen­eral,” said SharesPost an­a­lyst Ale­jan­dro Or­tiz. “That’s a sign that will be looked on fa­vor­ably in the next few weeks.”

Lyft beat Uber to the stock mar­ket last month with an IPO that raised $2.3 bil­lion, but its shares have been back­slid­ing af­ter an early run-up. Lyft’s stock cur­rently is hov­er­ing around $61, down from its IPO price of $72.

The rocky start may have prompted Uber to tamp down its IPO am­bi­tions. The com­pany is ex­pected to try to raise roughly $10 bil­lion and seeks a mar­ket value of $90 bil­lion to $100 bil­lion, ac­cord­ing to the Wall Street Jour­nal. That’s below ear­lier es­ti­mates of $120 bil­lion.

The in­vest­ment bankers handling Uber’s IPO are ex­pected to re­veal a pric­ing range for Uber’s shares later this month. That will come be­fore ex­ec­u­tives head out on a so-called road show de­signed to drum up in­ter­est in the IPO among in­sti­tu­tional in­vestors who will be given the first opportunity to buy the stock be­fore it be­gins trad­ing on the New York Stock Ex­change next month.

In the end, Uber is widely ex­pected to be the big­gest tech­nol­ogy IPO since Chi­nese e-com­merce gi­ant Alibaba Group went pub­lic in 2014. And it’s likely to be the largest among U.S. tech companies since Face­book took its bow on Wall Street seven years ago at a time when most peo­ple hadn’t ever con­sid­ered us­ing an app on their smartphone to sum­mon a ride from strangers driv­ing their own cars.

Uber launched in 2009 as UberCab, a black car ser­vice where cus­tomers could hail pro­fes­sional driv­ers with a few taps on a smartphone. It short­ened its name to Uber in 2010, dis­tanc­ing it­self from the taxi­cab in­dus­try, which has crit­i­cized the com­pany for op­er­at­ing un­der less reg­u­la­tion than the tra­di­tional taxi in­dus­try.

The com­pany op­er­ates in 65 coun­tries and has com­pleted 10 bil­lion trips world­wide.

Uber is also ex­pand­ing in other mar­kets such as freight while of­fer­ing other ways to get around with shared scoot­ers and bikes. Its fast-grow­ing food de­liv­ery business, which spans 500 cities glob­ally, dou­bled its rev­enue to $757 mil­lion in 2018 from $367 mil­lion in 2017. AP

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