Uber's growth stalls ahead of planned IPO

Uber's growth stalls ahead of planned IPO

Ride-hailing and delivery giant Uber Technologies has revealed losses in excess of US$1 billion in the three months to 30 September as its growth continues to stall.

Uber has reported growth in its bookings has risen by just six per cent in the quarter, which is its third quarter in a row of single-digit growth.

The US$1.07 billion loss was also a 20 per cent increase from the previous three-month period.

San Francisco-based Uber is now looking to expand its electric bike and scooter services along with food delivery as the decade-old business faces a period of slowing growth.

"We had another strong quarter for a business of our size and global scope," says Uber's CFO Nelson Chai.

Chai also flags the potential for a merger with India-based Ola to offset a slide in bookings growth and solidify Uber's position and market share in India and the Middle East.

As a private company, Uber is not required to disclose its financials but the company began disclosing some of its numbers last year.

Its gross bookings for the three months to September 30 were US$12.7 billion, up six per cent from the previous quarter which also represented a rise of 41 per cent from a year ago.

Uber's bookings growth hit the 30 percent mark in late 2016 but since then it has slowed rapidly into single-digit territory in each quarter.

The company, valued at $US76 billion, is planning an initial public offering next year and is under pressure to show it can still achieve its remarkable growth and market share to achieve profitability.

Japanese investor SoftBank took a 15 per cent stake in Uber in January which included a provision that requires Uber to file for an IPO by 30 September 2019, and if that doesn't happen then the company risks allowing restrictions on shareholder stock transfers to expire which would cause massive problems for Uber's ownership structure and value.

In the past 12 months, under new CEO Dara Khosrowshahi, Uber has exited some unprofitable foreign markets and shifted the savings into scooters, bikes, food delivery and freight-hauling.

Uber Eats has been a star performer with US$2.1 billion in booking revenue, which is more than double the previous year, and Khosrowshahi has outlined plans to double its investment in freight-hauling which allows truck drivers and fleet managers to operate under its platform.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How communications technology can raise the bar on customer service, employee experience
Partner Content
From capturing feedback early to providing messages with a higher rate of cut-through, ...
Advertisement

Related Stories

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

Apollo to divest large share of motorhome fleet to get Tourism Holdings merger over the line

In an effort to appease Australian and New Zealand regulator concer...

Atturra looks to become an IT powerhouse after acquiring MOQ for $15.5 million

Atturra looks to become an IT powerhouse after acquiring MOQ for $15.5 million

Atturra (ASX: ATA) is looking to become one of the nation&rsqu...

Adelaide craft beer brand Little Bang Brewery picked up by local investment manager Duxton

Adelaide craft beer brand Little Bang Brewery picked up by local investment manager Duxton

The pubs and hotels arm of boutique investment manager Duxton has a...

Carsales.com announces $1.2 billion raise to fully acquire Trader Interactive

Carsales.com announces $1.2 billion raise to fully acquire Trader Interactive

Vehicle classifieds company Carsales.com (ASX: CAR) has announ...