Uber
Uber's Q3 report is gloomy news for the company's investors as Uber struggles to become profitable. The ride-sharing giant has struggled to become profitable despite explosive growth, both domestically and internationally. Its rapid growth has at least partly negated the mounting losses, as some experts report, but the slowing of Uber's growth may pose a threat to the company. In response to the report, Uber CEO Dara Khosrowshahi stated that the company intends "total company EBITDA profitability for the full year 2021."
Uber's Q3 report prompted increased investigation from experts who are becoming increasingly curious as to how the company intends to reverse its years-long issue with profitability. For the most part, Uber has not fared well when questioned over its business practices and how it plans to change its fortunes. For example, Uber CFO Nelson Chai was recently questioned by Goldman Sachs Analyst Heath Terry, who asked if there was "a level of revenue or a level of scale that is assumed in that math for the company that you'd be willing to share that's implied for that degree of profitability?" Chai did not answer the question directly, opting instead to insist that overhead would grow more slowly.
Similar events have played out since the report was released. Details were in short supply, and often, questions were outright avoided when experts tried to seek answers. Uber's inability to address problems facing its profitability stands in stark contrast to the practices of its contemporary Lyft
The inability of Uber leadership to adequately address concerns of profitability or even provide details into its supposed solutions is especially worrisome as Uber's stocks have fared poorly since its May IPO. Since its debut on the New York Stock Exchange, the company's shares have dropped 38%, a sobering figure for investors. The inability for the company to become profitable raises grim questions for Uber's future as a publicly-traded company, with some media outlets even referring to Uber's stock problems as a "crisis".
As Uber continues to be tight-lipped about how it intends to address the mounting financial problems it faces, confidence in the company continues to decline. With leadership that is unable even to answer basic questions about their company, it is unlikely that Uber will come out of its financial problems anytime soon.
- https://investor.uber.com/news-events/news/press-release-details/2019/Uber-Announces-Results-for-Third-Quarter-2019/default.aspx
- https://www.cnbc.com/2019/11/04/uber-uber-q3-2019-earnings.html
- https://knowledge.wharton.upenn.edu/article/uber-profitability/
- https://finance.yahoo.com/news/uber-stock-is-in-crisis-heres-the-biggest-problems-right-now-204232468.html
- https://www.nytimes.com/2019/10/30/technology/lyft-earnings-profitability.html