Uber to be profitable by end of 2020 says CEO
Firm to focus on markets where it can be leader
Uber may have posted losses of $1.1bn (£851m, €1bn) in the last three months of 2019, but CEO Dara Khosrowshahi says the business will be in profit by the end of the year.
Losses for the full year were $8.5bn so what lies behind Khosrowshahi’s optimism?
It may have been buoyed by Uber’s total revenues jumping by 37 per cent in that quarter to $4bn. But it also comes down to a realisation that Uber needs to “Stick to the knitting” and focus on the business in which it made its name.
To most, Uber is about travel and the number of trips booked on its online platform rose by 28 per cent. Yet Uber morphed into associated markets and diversified into take-away food delivery, which had a negative impact on its bottom line.
Uber acted fast and set about implementing a cost-cutting programme as investors became impatient.
It significantly reduced its workforce at Uber Eats last October and the CEO said investment in that division is expected to decline after March. It also reduced staffing in its marketing and recruiting departments. Uber also sold off some of the other food-based businesses dragging down its overall performance such as Uber Eats India, which it sold to a local start-up in return for a share in the business.
“We recognise that the era of growth at all costs is over,” said Khosrowshahi. He added that the firm will focus on markets where it can be the number-one or number-two player.
Shares in Uber soared 5 per cent in after-hours trading on the back of the statement. Uber stock has risen some 40 per cent since its November low of $26 per share.
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