Ride hailing giant Uber hopes to be profitable by 2021, its chief executive has said, as the company booked a more than $1bn loss in its third quarter earnings.
Uber beat Wall Street estimates for revenue over the period, as the number of people using its ride-hailing and food delivery service increased. However, it still booked a net loss of $1.16bn (£900m) for the quarter, topping its $986bn loss during the same period last year.
The ride hailing giant said total revenue rose nearly 30 per cent to $3.81bn, beating analyst estimates of $3.69bn, in its first financial figures since announcing in August it had turned a more than $5.2bn (£4bn) loss following its float earlier this year.
Chief executive Dara Khosrowshahi told broadcaster CNBC the firm is hoping to turn a profit for the first time in its history in 2021.
“While we haven’t finalised our planning – and it’s going to take a lot of hard work from a lot of folks – we are actually targeting 2021 for adjusted EBITDA profitability full-year.
“We know there’s expectation of profitability and we expect to deliver it for 2021.”
Uber has disappointed investors since its May listing with shares closing in the US valued at $31.08, 30 per cent down on its $45 per share flotation price. They fell even further to $29.69 in after hours trading, 4.5 per cent down on Monday’s opening price.
The company said monthly active platform users rose to 103m globally in the third quarter, up from 82m a year earlier, but fell short of analysts’ estimates of 105m.
Both Uber and arch-rival Lyft have relied on heavy subsidies to attract riders in the past. Both are still making losses, but are ploughing money into new initiatives. In Uber’s case, these include food delivery via Uber Eats, freight hauling and autonomous cars. It even announced a move into financial services, late last month through its Uber Money venture. The ride hailing giant said costs jumped by about one-third to $4.92bn over the period.
Despite this, the firm has implemented a number of cost-cutting measures since Khosrowshahi took charge earlier this year. This has included laying off more than 1,000 employees in a bid to reduce spending.
Khosrowshahi said: “We’re pleased to see the impact that continued category leadership, greater financial discipline, and an industry-wide shift towards healthier growth are already having on our financial performance.”
Alyssa Altman, transportation lead at digital consultancy Publicis Sapient, said: “With a cooling competitive landscape, Uber’s growing proposition is still unwaveringly strong – especially as it continues to diversify from its ridesharing roots into a broader consumer operating system; offerings such as UberEats and UberFreight showcase potential to monetize at scale.
“Furthermore, if ride-share prices increase as expected, although bad news for you and me as consumers, this is good news for Uber as the core of its business could potentially move along the path towards profitability.”
(Main image: Getty)