Overnight, Uber delivered its first quarterly results since going public earlier this month. The ride hailing giant lost more than $US1 billion in the first three months of 2019 as revenue growth continued to slow.
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Uber generated $US2.76 billion in adjusted revenue in the first quarter of 2019, just beating analyst estimates, but falling short of revenue growth in the previous quarter. Users and total bookings continued to grow but are also showing signs of tapering off.
Uber stock ticked up slightly on the news but is still below $40 and its initial listing price of $45.
Now a decade old, Uber has disrupted the taxi industry, collecting billions from venture capitalists and Saudi Arabia public money to break into global markets. But it has faced constant battles with regulators and its own drivers, as well as some disturbing cultural problems.
The problems and an inability to turn a profit has meant Uber has struggled to win over Wall Street investors since going public earlier this month. The company’s main rival, Lyft, has also struggled to make a profit and has been battered by the share market since going public in April. It too lost over $US 1 billion in its first quarter of the year.
The struggles of the ride sharing giants will likely give pause to a host of fellow Silicon Valley tech companies considering an IPO.
The results showed Uber continued spend billions on expansion — costs and expenses totalled $US4.1 billion for the quarter — but Uber CFO Nelson Chai did not rule out further heavy spending.
“Our investments remain focused on global platform expansion and long-term product and technology differentiation, but we will not hesitate to invest to defend our market position globally. We maintained stable regional ride sharing category position in the quarter and started to see signs of less aggressive pricing by some ride sharing competitors, which has continued into Q2 2019.”
On an earnings call Uber CEO Dara Khosrowshahi acknowledged the increasing competition Uber has experienced in recent years.
“Today it is challenging in that there are many players that are well-funded and well operated and they’re competing to win,” Khosrowshahi said.