Sat, 1st Jun 2019
Ride-hailing company Uber posted a $1 billion loss after debuting in Wall Street, but its food operation has performed well.
Uber’s ride-hailing business has posted disappointing results, however the Uber Eats arm of the company has grown quite rapidly over the same time period. Uber’s revenues hit $3.1 billion for the first quarter of 2019, an increases of 20% compared to the same period a year ago. While revenues are up, spending has also increased so the company has struggled to become profitable.
Competition from Lyft has seen the company forced to invest in driver incentives and promotions for riders. The company has also invested in autonomous vehicles and is faced with challenges in the form of increased regulation in many parts of the world, including London, where the congestion plans make operating expensive for Uber drivers.
In spite of the losses, and the fact that shares in Uber are still trading below their IPO, Uber’s bosses maintain that the company’s performance is promising, and that customer engagement is better than ever before. The company is averaging 17 million trips per day worldwide, with revenues up by 26% in the US, Canada, and the Middle East, Europe and Africa. Revenues are down in Latin America, however.
Food delivery company Uber Eats has seen revenues increase by 89%. This will be a concern for FTSE 100 listed rival Just Eat, who is currently trying to avoid relegation to the FTSE 250, and is struggling in the face of competition not just from Uber Eats, but also Deliveroo and other rivals.