Uber is Currently Stuck at a Fork in the Road

Troy Hoffman Contributor
Uber is Currently Stuck at a Fork in the Road
Read Time: approx. 2:31

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Tag This: Uber shares surged on Friday after the company signaled that it may be profitable sooner than expected. Despite the fact the ride-sharing giant lost $1.1 billion in the fourth quarter of last year, investors rewarded the stock with a five-star rating to end the week.

Flag This: Uber is stuck at a fork in the road. On the left, the company can chase more markets. We’ll call this road “Growth”, and the speed limit tends to be higher unless you get hit with speeding tickets – like regulation woes in California, Colombia, and Canary Wharf. On the right, the company can choose more money. We’ll call this road “Profitability”, and although the speed limit is lower, after what happened to companies like WeWork in late 2019, investors are starting to put more emphasis on this for big-name tech startups. To the first point, Uber Eats gross bookings rose 71% year over year. This division clearly opted to take a left at the fork. Uber’s ride division, however, grew at just 20% in the same period, meaning it’s trying to merge into the profitability lane. After choosing the highway of growth for so long, Uber has signaled that going forward, it may be taking the road less traveled.

The chart below maps Uber’s journey since 2016, highlighting the gross bookings, revenue, and operating losses over the past four years.

Infographic: Uber's Blockbuster Growth Comes at a Hefty Price | Statista

Credit: Statista