When you’re only is worldwide domination, then you don’t have time to care for other unimportant things like money. Uber, the largest cab aggregator which operates in over 400 cities across the globe seems to be following the same mantra for success. Though there’s been a sure shot uptick in the company’s business, it has come at the cost of growing losses each year.
The $63 billion ride-hailing is operating at major losses which are expected to amount to a significant $3 billion, reports The Information. It is also being corroborated by Bloomberg who is of the opinion that Uber will report another massive loss, in the ballpark of $800 Mn, due to instability around the venture since its exit from China. Due to the acquisition of the company’s China operations by Didi Chuxing, the losses had surged beyond $580 million in the first quarter to a massive $800+ million in the second.
In addition, citing resources aware of the matter, the reports mention that Uber has already equaled the previous year loss of $2.2 million in just nine months of operations. It is now said to be on track to lose over $2.8 billion in the fiscal year 2016 but the percentage growth in this quarter is less as compared to the previous one a year ago. The company is also setting itself up to report nearly $1.7 billion of revenue in this quarter, along with the overall net revenue surpassing $5.5 billion in 2016.
The ride-hailing giant is a long way from profitability but it is looking to be the forerunner pushing the boundaries on innovative automotive technologies. Though it might be facing backlash for its autonomous driver tests in California, it is continuing the trials to better their sensor systems and software technologies.
The company is also competing against Lyft in the U.S, and several other similar competitors around the world. This is creating pressure on Uber to continuously pump capital into their global operations to stay relevant, offer discounts, increase driver pool and expand operational services. Recently, Grab and Careem, the Southeast Asian and Middle-eastern rivals of the company have secured investments to drive their operations to curtail the presence of Uber in their countries.
There will, however, soon come a time when everyone will be required to slash their discounts and benefits to operate on a similar platform. It will the real test for these companies and will be helpful in deciding which brands will woo the customers, conquer the market and emerge as survivors in this battle.
