Uber Inc financial report has gone from bumpy to bumpier. In the first-quarter sales, the company has reported a $1.01 billion loss among the largest of any public company.
The shares on the stock market reported its slowest growth in the first three months of 2019. With a revenue of $3.1 billion, about 25% slower growth recorded in the first quarter ever since it began disclosing its results in 2017.
The results compounded stormy months for Uber Technologies Inc. This year supposed to be good for the company, as set to be a glorious initial public offering but offering ended with a moan as many of the investors questioned about the unprofitability of the company. Uber’s stock has fallen rapidly for more than 11 per cent.
In a report, rival company Lyft Inc shares have also fallen as the company recently reported a quarterly loss of about $1 billion. The loss of these companies has raised questions about how capable this business can be in terms of profitability.
The low debuts of Uber and Lyft in the stock market have brought uneasiness in the rest of Silicon Valley, where many other tech companies planning to go public, for example, WeWork, real estate firm and food-delivery companies.
Khosrowshahi, the chief executive indicated that Uber’s loss would not end soon as the company planned to expand more. In Uber’s costs and expenses are about $4.1 billion. “We are now focused on executing our strategy to become a one-stop shop for local transportation and commerce,” Mr Khosrowshahi said.
Nelson Chai, Uber’s chief financial officer, said that the company is investing in “product and technology differentiation” and also “We will not hesitate to invest to defend our market position globally,” he further added.
Uber’s shares have fallen from their $45 offering price. Kathleen Smith, a principal at Renaissance Capital, said “Wall Street had expected the losses and slowing growth because Uber had indicated them in its I.P.O. paperwork”. “if Uber does nothing worse than it said, it may be a good result for them,” she further added.
Uber has a big history of battling with competitors in terms of fierce price wars, offering subsidies to riders and drivers. They were more focusing on building their brand and products than paying incentives.
Uber’s newer businesses, such as freight delivery and food delivery, grew well at a healthy pace. Uber Eats, doubled from a year earlier in services, while Freight jumped more than 200 per cent. The company is also planning to expand UberEats in Latin America and Japan.
Some of the analysts raised questions about whether UberEats can survive the big race. Mr Khosrowshahi said “Uber expected to remain the largest food delivery service outside China, whether it held its position through competition or by acquiring a competitor. Any acquisition would be a Plan B.