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    0.020
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    -0.010
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    10,231.970
    -42.480
    -0.4%
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    2.650
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  • WAIT.USA
    158.000
    8.000
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  • DATVF.ATLPHL
    1.823
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    1.702
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  • DATVF.VEU
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  • DATVF.LAXSEA
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  • DATVF.SEALAX
    1.291
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  • DATVF.VSU
    1.299
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  • DATVF.VNU
    1.541
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  • DATVF.CHIATL
    2.062
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  • DATVF.LAXDAL
    1.679
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  • DATVF.DALLAX
    0.919
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  • ITVI.USA
    10,238.280
    -46.690
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  • OTRI.USA
    8.180
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  • OTVI.USA
    10,231.970
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  • TLT.USA
    2.650
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  • WAIT.USA
    158.000
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NewsStartupsTechnology

Uber sees a 38% yearly increase in gross bookings as it gears up to face competition

 (Photo: Pexels)
(Photo: Pexels)

Though a privately-held company, Uber Inc. chooses to announce its quarterly earnings to investors and the public. The ride-hailing giant has reported a loss of $891 million in Q2 2018, but showed increased revenue to the tune of $2.8 billion. Overall, it has been an improved performance as net revenue climbed 49% compared to the second quarter last year. The net loss has also considerably reduced by 16% over the quarter compared to $1.1 billion last year – painting a picture that the company is narrowing its losses as it gets bigger.

In the first quarter this year, the company brought in a profit of $2.46 billion, primarily due to selling its operations in South-East Asia and Russia for $3 billion. Regardless, the loss margin was much higher this quarter compared to Q1, which with the exclusion of the sold operations stood at $550 million. The widened loss could be attributed to the fact that the company is investing more in foreign markets and new businesses like UberEats, while also foraying into the scooter-sharing services.

The company is in a decisive fight for dominance in the scooter-sharing business, especially in dense urban regions. Reports from various sources confirm that the scooter-sharing companies are eating into the taxi-hailing market. In a bid to take the fight head-on, Uber acquired Jump this year for nearly $200 million. Jump, is a bike-sharing startup that has its presence in San Francisco, Austin, Chicago, and Washington DC.

An analysis that came out last month from Santhosh Rao, a policy researcher at Uber, pointed out that Uber trips in San Francisco have fallen by 10% since February, which also marked the entry of Uber into the scooter-sharing market. The number of taxis hailed fell even harder during peak hours, where Uber trips went down by nearly 15%.

The aggressive expansion in different sectors could be because its core taxi-hailing business is under severe threat from local competitors like Lyft and due to regulatory measures and crackdowns it faces in Europe. The company was forced to sell its SE Asia and Russian operations last quarter, as its CEO Dara Khosrowshahi insisted that they would not be profitable any time soon. Recently, the curtains fell on the self-driving truck program of Uber ATG, with the company explaining that it would rather expend its resources on self-driving car programs than on trucks.

But this apart, the company has seen a considerable increase in gross bookings which grew by 38% year-on-year to reach $12 billion. The drivers’ paychecks saw a boost as well, which saw them making $8.23 billion this quarter, with an added incentives payment of $427 million.

The company now has a runway of $5.7 billion in cash and a long-term debt of $4.7 billion, showing that it is on track to its IPO, which Khosrowshahi has said would happen in the second half of 2019. Investors value the company at $70 billion, making the intended IPO one of the largest in U.S. history. However, the company is without a CFO – a vital cog in the build-up to the IPO – with Khosrowshahi’s hunt still in vain. Uber had been in talks with Zane Rowe, the CFO of VMWare Inc. for quite a while, but Rowe had since then excused himself from the CFO race.

Uber under ex-CEO Travis Kalanick had taken up growth and expansion as its primary objectives, while burning through cash reserves without a second thought. The current CEO seems to be on the same path, as in the one year of him being at the helm, Uber has burnt $4.5 billion.

Though the all-guns-blazing approach does sound logical, it might leave a bitter aftertaste especially as Uber has put its eggs in many baskets. After shutting down its self-driving truck program, it comes to light that the company’s self-driving car operations might not be performing to the expected level, even as Uber spent as much as $200 million this quarter on the technology. And yet, it still has a long way to go before it catches up with competition in that segment as Google’s Waymo seems to be powering ahead and leaving everyone in the dust.

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Vishnu Rajamanickam

Vishnu predominantly covers stories coming out of Europe within the logistics and transportation space, especially related to the trucking sector - be it current affairs, trend analysis, trade forecast, or technology. He also connects with key stakeholders within the freight industry, profiles startups, and brings in perspective from thought leaders in the freight space. In his spare time, he writes net-noir poetry, blogs about travel & living, and loves to debate on international politics.
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