Wednesday, November 14, 2018

"Uber posts $1 billion loss in quarter as growth in bookings slows"

From Reuters:
Uber Technologies Inc said on Wednesday that growth in bookings for its ride-hailing and delivery services rose 6 percent in the latest quarter, the third quarter in a row that growth has remained in the single digits after double-digit growth for all of last year.

The San Francisco-based firm lost $1.07 billion for the three months ending Sept. 30, a 20 percent increase from the previous quarter but down 27 percent from a year ago, when the company posted its biggest publicly reported quarterly loss on the heels of the departure of Uber co-founder and former Chief Executive Travis Kalanick.

Uber is seeking to expand in freight hauling, food delivery and electric bikes and scooters as growth in its now decade-old ride-hailing business dwindles. The company, valued at $76 billion, faces pressure to show it can still grow enough to become profitable and satisfy investors in an initial public offering planned for some time next year.

Its adjusted loss before interest, taxes, depreciation and amortization was $592 million, down from $614 million last quarter and $1.02 billion a year ago.

"We had another strong quarter for a business of our size and global scope," said Nelson Chai, Uber's chief financial officer, who joined in September after the job had been vacant for three years. He emphasized the "high-potential markets in India and the Middle East where we continue to solidify our leadership position."

Broader economic conditions and sustained losses could also push Uber to merge with rivals in India and the Middle East, particularly as Uber and India-based Ola share an investor in SoftBank Group Corp (9984.T).

Uber's gross bookings were $12.7 billion, up 6 percent from the previous quarter and up 41 percent from a year ago. In late 2016, Uber's quarterly bookings growth approached 30 percent, and in early 2017 it still sustained double-digit growth quarter-over-quarter. At the start of this year, however, bookings growth slid into the single digits.

As a private company, Uber is not required to publicly disclose financials, but last year started releasing selected figures.

BET ON SCOOTERS, BIKES AND TRUCKS
Since CEO Dara Khosrowshahi took the helm than a year ago, Uber has retreated from foreign markets where it had suffered heavy losses and shuttered certain pricey ventures including self-driving trucks. But Khosrowshahi has plowed the savings back into its freight-hauling, food-delivery, and electric scooter and bikes businesses.

An investment by SoftBank that closed in January, which gave the Japanese investor a 15 percent stake in Uber, included a provision that requires Uber to file for an IPO by Sept. 30 of next year, or the company risks allowing restrictions on shareholder stock transfers to expire. That could create a mess for Uber's ownership structure and equity value, and pose regulatory problems....MORE
As noted in March 7's: "Uber Spent $10.7 Billion in Nine Years. Does It Have Enough to Show for It?"
Ha!
Back in December 2016 one of the authors of this piece, Eric Newcomer, came dangerously close to mansplaining Uber, Uber's losses and Uber in China to the FT's Izabella Kaminska.*
His central fallacy (besides arguing in public) was that Uber, having ditched the money-sucking black hole that was their China operation was now heading for the broad sunlit uplands of  taxi service (thanks Winston). He was wrong.
Ahem.
*Besides the fact Izabella was one of the first journos—along with Pando founder Sarah Lacey who had the advantage of being the target of an Uber smear campaign funded to the tune of a mil. to tip her off that something was not right over on Market St., San Francisco, CA, USA—besides the fact Ms Kaminska was on the story back in 2014 she has additionally posted more on the Ubester than most folks alive.
Here is part of the to-ing and fro-ing:
There's more, here's one of the threads. [oops, looks like he deleted the tweets]

A couple months later we recapped the story in:
Notes to Self If Arguing With The FT's Izabella Kaminska: Uber and the Multi-Billion Dollar Losses Edition
The denouement in that piece was epic.
Posted by at