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Tuesday 20th March 2018

Uber Reacts to Market Hit with a Challenge to Win

Business

7Dnews London

Fri, 09 Aug 2019 14:02 GMT

Leading ride-share company Uber drastically failed to meet Wall Street expectations, causing its shares to plunge, AFP reported on Thursday August 8th. The

San Francisco company said revenue grew 14% to $3.2 billion but it lost $5.2 billion as compared to losing $848 million in the same period last year. This was due to stock-related compensation expenses that took a huge bite out of its revenue.

According to Uber, which operates ride hailing in global markets and has several related transportation services, the shares were down more than 7% in after-market trades that followed the release of the earnings figures.

According to CFO Nelson Chai, the company plans to invest aggressively and heavily in order to secure growth, however, he added that the company also requires that growth to be healthy and is confident that it has been making good progress in that direction so far.

The Uber Eats restaurant meal delivery service grew more than 140% compared to the same quarter last year, according to Chai. Revenue from an Uber Freight service that matches truckers with shippers saw revenue up tenfold.

The earnings report came just weeks after Uber confirmed it is cutting 400 jobs from its marketing team of more than 1,200 workers to reduce costs and improve efficiency.

Last June, Uber CEO Dara Khosrowshahi tightened his grip at the helm of the ride-hailing firm in the wake of a bumpy stock market debut. At an initial price in May of $45 for the IPO, translating to a market value of $82 billion, Uber shares went into reverse and have struggled to get back to the offering value.

In its plan to cover all transport, Uber has been introducing new carrier services, such as electric bikes and scooters, as well as meal deliveries and has long-term projects on autonomous vehicles and flying taxis.

Lyft.Inc who has been a fierce rival for Uber, reported higher losses for the quarter on Wednesday but maintained that it is seeing "positive momentum" that will help the company cut losses over the rest of 2019.


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