Uber posted an $800 million loss in the last quarter on revenue of $1.7 billion.
U.S. ride-sharing leader Uber posted an $800 million loss for the third quarter on $1.7 billion in revenues, a loss actually lowered by the company’s decision to sell off its unprofitable Chinese operations.
Despite a modest profit during the first quarter, Uber’s losses came to $2.2 billion for the first nine months of 2016. But the company’s revenues have also continued to grow as more users discover the service. Net revenues for the third quarter hit $1.7 billion – excluding payments to drivers – and $3.76 billion through the end of September. A report by Bloomberg estimates Uber is targeting $5.5 billion for all of 2016.
Uber exited China earlier this year, selling off its money-losing operations there to local competitor Did Chuxing. But The San Francisco-based ride-sharing firm is continuing to run deep in the red in the U.S., in part due to increased competition from Lyft and other ride-sharing services.
Uber is also in a shoot-out with the likes of Amazon and GrubHub as it launches new services, such as a food delivery service.
Meanwhile, it is ramping up investments in advanced technologies, such as autonomous and fully driverless vehicles, hoping to eventually launch fleets of vehicles with no driver onboard. Uber founder Travis Kalanick has said he believes that would drive down the cost of using a ride-sharing service so low it would be less expensive than owning a private automobile.
(California DMV pushing to end Uber’s autonomous vehicle ride-sharing. Click Here for the story.)
But that push is also running Uber into the latest in a series of legal tangles. The company last week launched an autonomous vehicle pilot program in San Francisco, using 11 specially modified Volvo XC90 SUVs. Uber decided not to apply for a California Department of Motor Vehicles permit, the DMV now trying to legally halt the project.
The San Francisco test uses modified Volvo XC90s - one shown here on the Golden Gate Bridge.
Uber has continued to face legal challenges in a number of cities and countries over a variety of issues. In a number of instances, it has been hit with restrictions on its operations, including the ability to pick up and drop off passengers at major airports.
Nonetheless, with a market capitalization of $68 billion, it has the resources to weather its current financial storms, at least for some time. The bigger question, according to some analysts, is how the latest losses will impact the anticipated Uber IPO.
(For more on the Uber San Francisco project, Click Here.)
But barring a series financial meltdown at the company, most observers believe the company is solidly planted in a new world of so-called “mobility services” that could transform both what and how people drive in the years ahead.
Officials at rival Lyft have forecast that within a decade, ride-sharing could become so inexpensive – thanks to driverless vehicles – that most Americans will abandon their personal vehicles.
Few observers are betting on that dramatic a transformation, at least in the near-term, but auto industry officials, including the likes of Ford Motor Co. CEO Mark Fields, have acknowledged they are rethinking long-term plans to take account of a significant increase in ride-sharing usage. Most observers do believe there will be a sharp impact on vehicle purchases in high-density urban centers.
(Google, FCA plan to launch autonomous ride-sharing pilot program. Click Here for more.)
But those same automakers are also taking steps to take advantage of those changes. General Motors, for example, has invested $500 million into Lyft – and it is marketing some of its products to the service’s drivers through discounted leases. Toyota, Honda and Volkswagen are among other automakers that have, this year, tied up with various ride- and car-sharing services, including some hoping to challenge Uber’s dominance.