A MoneyTransfers analysis of Uber Technologies Inc (NYSE:UBER)’s financial results shows that it has been losing money since 2014. The cumulative loss between then and now stands at $25.5 billion. Uber’s non-loss-making year during that period was 2018, when it made a profit of $1B. However, it lost $8.5B in 2019, making that its worst year in business.
“These losses are primarily due to Uber’s aggressive pricing strategy to gain market share,” alludes MoneyTransfers CEO, Jonathan Merry. He further suggests, “That strategy led it to give away rides at much lower prices than its competitors while it incurred huge costs on marketing. Moreover, the company also spent heavily on driver subsidies, increasing its market share and net revenue from fares declined.”
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Is Uber Turning The Corner?
Despite the loss-making trend, 2021 provides a gleaner of hope for the firm’s turnaround. According to Uber’s financial records, it made losses amounting to $400 million. That figure was the least amount of loss it made in the eight years. Moreover, it represented a roughly 95% reduction from its 2019 loss of $8.5 billion.
The irony in Uber’s loss-making streak is that its other key measures are healthy. For instance, it grew its gross bookings from $16B in 2016 to $90B in 2021, an increase of 462%.
Again it has expanded its customer base elevenfold from 2015 figures of 11 million. Meanwhile, it has almost doubled its trips from 3.79B in 2017 to the current 6.3B. As a result, the firm’s revenues have consistently grown to fuel hopes for a near turnaround.
Uber's Turbulent Expansion Drive
Uber’s expansion drive has run into headwinds both in the U.S and in other countries where It had opened shop. For starters, it faces cutthroat competition from other taxi-hailing firms, including Didi Chuxing and Lyft.
It also faces regulatory hurdles related to its relationship with its drivers in many countries. Most of these cases are in America, where taxi drivers and their federations are fighting for better labor terms. However, its biggest hits have been in Europe, where Germany, the Netherlands, and the UK have ruled in favor of the drivers.
Read the full story here: Uber's Cumulative losses since 2014 are approaching the $26B