The world’s largest taxi-hailing company has posted a loss of $1.01 billion in its maiden results after a lacklustre flotation earlier this month.
Uber’s net loss for the first quarter was in line with market expectations and came on revenue of $3.1 billion, which was at the top end of preliminary estimates.
The results did not come as a surprise to investors because Uber has consistently struggled to make money, having lost $7.9 billion since 2009. Its loss of more than $3.7 billion last year on revenue of $11.3 billion was the largest ever for an American start-up in the year before an initial public offering (IPO).
The results are the first for the ten-year-old company since it floated this month in what had been tipped to be one of the biggest valuations in history, at as much as $120 billion.
It quickly became a disappointment with its stock dropping 7.6 per cent on its first day of trading to a market value of $69.7 billion as investors questioned Uber’s ability to make a profit. Shares have stayed below the $45 float price but rose in late trading last night, up $1.12, or 2.8 per cent, at $40.87.
Uber was founded in 2009 in San Francisco and is best known for its taxi-hailing app which operates in more than 300 cities in 70 countries. The app allows users to book taxis on their smartphones, with Uber taking a quarter of the driver’s fare.
Alongside its taxi-hailing app, Uber also has a bike and scooter division, a freight business, a food delivery unit, a costly self-driving operation and even a division that is working on bringing flying taxis to a mass market.
Dara Khosrowshahi, its chief executive, said: “Earlier this month we took the important step of becoming a public company and we are now focused on executing our strategy to become a one-stop shop for local transportation and commerce. In the first quarter, engagement across our platform was higher than ever, with an average of 17 million trips a day and an annualised gross bookings run-rate of $59 billion.”
First-quarter revenue rose 20 per cent from a year ago when Uber made $2.58 billion. Revenue for Uber’s ride-sharing business rose 10 per cent compared with last year, to $2.34 billion, with gross bookings growing 22 per cent to $11.45 billion. Uber said that 76.7 per cent of its revenue came from ride-hailing and 17.3 per cent from Uber Eats.
In its IPO prospectus Uber acknowledged that it may never make a profit, having made “significant losses since inception” which it expects to “increase significantly in the foreseeable future”.
Part of the reason for this has been the intense competition from rivals across all its divisions, which has led to Uber spending millions on technology at the same time as spending heavily to subsidise rides and attract drivers.
Its sprawling number of divisions has also led to a boom in staff numbers, rising from 159 in 2012 to 22,263 global employees as of December 31, 2018, of whom 11,488 were located outside the United States. Its total number of drivers is 3.9 million at the last count.