Uber continues to dive into financial oblivion

(Bick Bhangoo) #1

Uber's third quarter on 2017 leads to a 1.46 billion loss, a massive 40% more than expected and is a continuation of the $1 billion loss it faced in the first half of the year. These numbers were made available in a document Uber prepared for its shareholders.

Dara Khosrowshahi, Uber’s CEO stated that these losses were due to the strict competition the company faced, both in the US and abroad. He went on to state that he does not see the US market increasing its profitability in the near future. He also stated that Grab is Uber’s main rival in Southeast Asia and will continue to give strict competition. “The economics of the market are not what we want them to be; it’s over-capitalized at this point.” In an optimistic tone, he added that they would continue to lean forward and push for more expansion, but the company will not prove to be more profitable at any time soon.

With this loss comes some good news, the company's revenues increased in this year's third quarter when compared to last years, in 2016 it was only $1.66 billion in comparison to this year's $2 billion. This went hand in hand with the increase in global gross bookings that rose from $8.74 billion to $9.71 billion. This information is what is keeping Uber afloat as it tries to seal the SoftBank deal, bringing in a much needed $1 billion to Uber and a further $9 billion to investors that will cash out some of their holdings. Khosrowshahi has to keep Uber afloat over the next 18 months and in good condition, he is planning an IPO in 2019 and needs SoftBank's income to meet the target.