With over 22,000 employees, it might be easy to assume that a company as large as Uber would be making a profit as big as their enterprise. In reality, the company size doesn’t always equal the company profit, and that reality is what Uber is facing.
On Thursday, August 8, 2019, Uber released their company loss of over $5.2 billion in the last three months, ranking this as their most significant quarterly loss to date.
A press release published on Thursday revealed that nearly $4 billion of the money lost is from stock-based compensation costs. Outside of those $4 billion costs, Uber faces a loss of over $1 billion, around a 30 percent drop from what they experienced in Q1.
Like in any industry, Uber and all of its subsidiary companies face some fierce high-level competition. Most commonly in the U.S., Uber faces its competitor Lyft, another transportation network company. Uber EATS shares a spot on the list of food delivery networks with many competitors including but not limited to Postmates, DoorDash and Grub Hub. With the current competition, Uber is not likely to make a profit anytime soon.
Despite the profit loss and a potential profit increase lying pretty far in the future, Uber seems to be remaining hopeful in the success of their company, as well as revenue opportunities and growth.
The company did reveal that they’ve seen a rise in bookings revenue of over 30 percent since 2018. They’re focused on company improvements and launched a new subsidiary company in July 2019, Uber Comfort. The parent company shared that Uber Comfort is a level above their current offering of UberX and offers more customized ride options and newer and more spacious vehicles. Uber is continuing to invest in strengthening its subsidiaries and product offerings.
Uber recognizes the speed of its growth and areas of opportunity for improvement. CFO, Nelson Chai, claims that they’re focused on aggressive growth, but ensuring that it’s healthy growth. They’ve also recently made changes at the corporate level to their marketing department, laying off about 400 people of the 1200 person department.
Their investments in Uber Comfort and amendments on the corporate level are just two of many ways the company is aiming for success. Whether the changes will lead to a positive impact on their profit or not, well...we'll just have to wait and see.
Philadelphia native and Penn State alumna, Kate Hynson, always had a flair for marketing. During her college years, Kate took on several brand ambassador roles and even a President role for the Penn State CHAARG chapter, which held over 275 members. Her ability to command a room and deliver a clear message aligned perfectly with the myWorth mission as we aim to provide clear financial guidance to women on a mission. Through myWorth, Kate has been able to help women feel empowered by fearlessly owning their finances.