Uber Technologies Inc. said on Wednesday that growth in bookings for its ride-hailing and delivery services rose 6 per cent 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 US$1.07-billion for the three months ending Sept. 30, a 20-per-cent increase from the previous quarter but down 27 per cent 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 US$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 US$592-million, down from US$614-million last quarter and US$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.
Uber’s gross bookings were US$12.7-billion, up 6 per cent from the previous quarter and up 41 per cent from a year ago. In late 2016, Uber’s quarterly bookings growth approached 30 per cent, 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.
Revenue for the quarter was US$2.95 billion, a 5 per cent boost from the previous quarter and up 38 per cent from a year ago. That trailed the second-quarter year-over-year revenue increase of 63 per cent.
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 Mr. 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-per-cent 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.
Uber is considering moving its public debut up from the second half of 2019 to the first half, given concerns about a market downturn and an expected IPO from its chief U.S. rival, Lyft Inc., according to sources familiar with the matter.
Mr. Khosrowshahi has focused on growing Uber Eats, which took in US$2.1-billion in booking revenue, marking a 150-per-cent jump over last year and about 17 per cent of total bookings.
Uber has also pledged to double its investment over the next year in Freight, a brokerage service set up in May, 2017, for truck drivers and fleet managers looking for cargo to haul. The business is doubling the number of loads it connects with truckers every quarter, Uber said.
But it is not yet clear whether either business can sustain a profit. It is also unclear how Uber will fare in a shakeout in the crowded global food-delivery industry, and whether its freight business will be widely adopted by fleet managers.