Uber posts $50 bln in annual bookings as profit remains elusive ahead of IPO
By Heather Somerville
SAN FRANCISCO, Feb 15 (Reuters) - Uber Technologies Inc
had $50 billion in total bookings for its ride-service
and food-delivery businesses last year, a testament to the size
and global reach of the company as it prepares to woo investors
in one of the biggest public stock listings to date.
But figures released by the company on Friday showed revenue
grew just 2 percent in the fourth quarter, a sign that Uber
continues to heavily subsidize rides in competitive markets,
raising questions about its future growth prospects.
Uber's full-year revenue for 2018 was $11.3 billion, up 43
percent from the prior year. Its losses before taxes,
depreciation and other expenses were $1.8 billion, an
improvement over the $2.2 billion loss posted in 2017.
Uber highlighted the annual bookings figure, which was up 45
percent over 2017, in its release on Friday of a smattering of
selected figures for its fourth-quarter and full-year results, a
practice it has had for the last several quarters as it
anticipated going public. The full-year figures are particularly
important to show potential investors the trajectory of the
business, as opposed to Uber's more erratic quarterly results.
Uber in December filed confidentially for an initial public
offering, which may come as early as the second quarter this
year. It is racing neck-and-neck with rival Lyft to become the
first ride-hailing IPO.
"Last year was our strongest yet, and Q4 set another
record," Uber Chief Financial Officer Nelson Chai said in a
Uber said gross bookings for the fourth quarter were a
record $14.2 billion, up 11 percent from the prior quarter.
That marks an improvement after bookings growth slowed to just
single-digit percentages throughout much of last
Uber's revenue in the fourth quarter reached $3 billion, up
2 percent from the third quarter and a 24 percent increase over
the previous year.
The food-delivery service, Uber Eats, accounts for more than
$2.5 billion in bookings quarterly, according to a person with
knowledge of the matter. Uber has trumpeted Uber Eats as the
largest online food delivery business outside of China.
Uber must convince public market investors that its market
share, growth trajectory, global scale and diversity of
businesses make it a compelling investment, despite its enormous
"Uber needs to show it can control costs and can make money,
basically provide a strong argument that its business model is
not broken and that it can achieve and sustain profitability
despite issues with drivers, customers and politicians," said
David Brophy, professor of finance at the University of
Michigan's Ross School of Business.
Ongoing intense competition with ride-hailing foes across
the globe has kept Uber in the red. Rivalries in India with ride
service Ola, in Latin America with Didi Chuxing and in the
Middle East with Careem have pressured Uber to lower prices,
raise driver commissions and invest heavily in marketing and
recruiting. Uber has held talks with Careem since the middle of
last year about a potential merger, but the companies have not
reached an agreement.
Uber Eats is also battling a crowded food-delivery industry,
forcing it to adopt discounting tactics to compete with
companies like food-delivery startup DoorDash, which is in the
process of raising $500 million from investors at a $6 billion
valuation, and restaurant and grocery delivery company
Postmates, which filed for an IPO this month.
Uber has no plans to slow investment in Uber Eats or other
costly areas such as autonomous car development to show profit
any time soon. The company's losses before interest, taxes and
depreciation spiked in the fourth quarter to $940 million, a 43
percent jump over the previous quarter and 21 percent increase
"I believe investors will forgive even higher fourth-quarter
losses if there's evidence of significant topline growth," said
Arun Sundararajan, a professor of business at New York
University Stern School of Business.
But, he said, Uber's business still represents a fraction of
global consumer spending on transportation, and "evidence that
Uber is making significant inroads into changing behaviors" is
critical to its long-term success.
(Reporting by Heather Somerville
Editing by Leslie Adler)
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