The first quarterly report since the ride-hailing company filed to go public in May shows that Uber is still haemorrhaging money, but sees bright spots in cross promotions of its services and expansions in new territories.
Just three weeks after its tricky IPO, Uber’s CEO Dara Khosrowshahi hinted to investors that the company that had become famous for its costly rider and driver incentives were diminishing in importance across Uber’s various categories. “We’ve more recently seen signs of competition becoming more focused on brand and products, versus incentives,” a trend he welcomed as far healthier.
But the losses have kept coming. Compared to the same time last year, in which the company lost $478 million, quarterly losses have more than doubled to $1 billion. The good thing is that Lyft also reported quarterly losses of over $1 billion too.
The call, which took place on Thursday, did little to settle concerns that a global ride-hailing business could become profitable any time soon. Ride-hailing revenues grew by 9%, a sign that growth has slowed.
Yet there were some bright spots. Uber Eats, the meal delivery service, more than doubled year-over-year, and will be expanding across Latin America and Japan. Its freight business also grew 200%.
One trend in which the company sees promise is that customers use of Uber products more than doubles overall if they use more than one product. The company is, however, only in the “very, very early” phases of this work.
“Really what we’re looking to do is significantly increase the percentage of our MAPCs [monthly active platform consumers] that use both products,” Khosrowshahi said. He added that the company is beginning to experiment in ways it can upsell to riders “in a way that, you know, to be plain spoken, isn’t annoying”.
Between brand strength and more effective activation, a greater focus on both could be the division that brings the company to profitablility through marketing.
Brand has always been important to the taxi business: think to the London black cab or New York’s yellow taxis. It has been part of the taxi’s history since the industry’s inception, as the Economist writes.
Just three weeks after its tricky IPO, Uber’s CEO Dara Khosrowshahi hinted to investors that the company that had become famous for its costly rider and driver incentives were diminishing in importance across Uber’s various categories. “We’ve more recently seen signs of competition becoming more focused on brand and products, versus incentives,” a trend he welcomed as far healthier.
But the losses have kept coming. Compared to the same time last year, in which the company lost $478 million, quarterly losses have more than doubled to $1 billion. The good thing is that Lyft also reported quarterly losses of over $1 billion too.
The call, which took place on Thursday, did little to settle concerns that a global ride-hailing business could become profitable any time soon. Ride-hailing revenues grew by 9%, a sign that growth has slowed.
Yet there were some bright spots. Uber Eats, the meal delivery service, more than doubled year-over-year, and will be expanding across Latin America and Japan. Its freight business also grew 200%.
One trend in which the company sees promise is that customers use of Uber products more than doubles overall if they use more than one product. The company is, however, only in the “very, very early” phases of this work.
“Really what we’re looking to do is significantly increase the percentage of our MAPCs [monthly active platform consumers] that use both products,” Khosrowshahi said. He added that the company is beginning to experiment in ways it can upsell to riders “in a way that, you know, to be plain spoken, isn’t annoying”.
Between brand strength and more effective activation, a greater focus on both could be the division that brings the company to profitablility through marketing.
Brand has always been important to the taxi business: think to the London black cab or New York’s yellow taxis. It has been part of the taxi’s history since the industry’s inception, as the Economist writes.
Sourced from Seeking Alpha, Ebiquity, The Economist
