Uber finally rejects growth-at-any-cost mentality, but will it help?

slowest rate of increase since Uber began reporting that figure. The total figure of $16.5 billion was also a little short of analysts’ expectations, as was the growth in average monthly customers using Uber services at least once.

What Uber seems to be doing is precisely what investors want now. The company is trying to stop growing where it doesn’t make sense. Third-quarter revenue from rides, excluding what Uber classifies as excessive driver incentives and driver referrals, increased 23 per cent in the quarter, rebounding from a growth slowdown. The adjusted revenue growth Uber Eats also accelerated.

The divergence between slowing growth in total transactions and a faster pace of revenue in crucial segments suggests that Uber has increased consumer prices, reduced incentives or made other tweaks to keep more revenue from each ride or food delivery — even if that means some people are turned off enough not to use Uber at all.

This is rational, yes, but acting like a sensible company may also crimp Uber’s eventual size and ambition. It’s useful to step back and see how much for has changed for Uber, Lyft and other young and richly valued companies. Ever since these companies went public, Uber and Lyft have been forced to shift gears and chase profits rather than boasting about how big they can grow if they swallow more of people’s current spending on transportation.

New normal

This is the new normal for companies like Uber: Investors want them to grow, but not if the growth is achieved with unsustainable spending or rash financial trade-offs. There in the penalty box is WeWork.

I will say that a forecast for profits-ish in two years is a long time in this constantly shifting industry.

Uber is in a tricky position. Its potential ceiling is much higher than Lyft’s because Uber has spread its tentacles into many parts of the world and expanded far beyond its original business of car rides at the push of a smartphone app.

That expansion also makes it difficult for Uber to improve its economics and quickly pivot from chasing growth to chasing profits. For every dollar of revenue in the first nine months of this year, Uber bled 25 cents of cash from its operations. That is a high rate of cash oozing out of the company, and it’s not trivial to reverse the trend.

Uber and Lyft also have to contend with interest by regulators and lawmakers to impose more restrictions or force them to increase driver earnings and cut back on the number of cars on the road in large cities.

Uber may slow the financial bleeding faster than planned, but its new profit mindset doesn’t change its essential character: a highly valued company that may — or may not — be a viable one.