Ride sharing app Uber may be one of the most popular apps on the market, but it seems that its profits are not mirroring its popularity. According to The New York Times, the company posted a record loss this week of a staggering $5.2 billion. The results predictably sent its stock into free fall in after-hours trading.
Though a majority of the losses come from one-time expenses, a whopping $1.3 billion did not, causing Wall Street analysts to wonder about the future of the brand, and of ride-sharing itself. With Lyft also showing that the industry might not be profitable, Uber has said that it will be more aggressive with other parts of its app, including its food delivery service, and even offering train and bus tickets.
“What we’re looking for is evidence that the company can reaccelerate revenue growth after the last few quarters,” said Tom White, a senior vice president at the financial firm D.A. Davidson, of the company’s prospects.
But despite the losses, Uber’s management remains optimistic.
“We think that 2019 will be our peak investment year,” said Dara Khosrowshahi, Uber’s chief executive, who insisted that losses will start to diminish over the next two years.
“We want to make sure that the kind of growth we have is healthy growth,” he concluded.
Khosrowshahi added there were many good things to consider: for example, bookings were up 31 percent from last year. Uber also gained more customers, bringing its total to over 100 million active riders each month. Moreover, revenue was up 14 percent, though the earnings were lower than expected.
But others are not so sure about the company’s future. Other hits to Uber include the fact that it has been outlawed in many foreign cities, such as Paris and Copenhagen, depriving the company of a full international market.
In addition to financial woes, Uber has been hit with its fair share of controversy, as many have also questioned the safety of the app. After the lax background checks employed by the company allowed criminals with serious offenses to be drivers, Uber vowed to do better.
However, the negative press has not stopped. Six people were killed in 2016 by an Uber driver picking up musical festival Kalamazoo attendees, per The Chicago Tribune, in addition to the recent murder of a college student who had mistakenly gotten into the wrong car.
Finally, Uber CEO Travis Kalanick was pressured by investors to resign from his position last year after he was accused of sexism in the workplace, per CNBC.
However, Khosrowshahi has shrugged off criticisms.
“This is a different Uber,” he said of the company.