Uber posts $1bn loss weeks after flotation

http://www.bbc.co.uk/news/business-48451339

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Uber’s shares have fallen more than 10% since the company floated this month

Uber has posted a $1bn (£790m) loss as the ride-hailing firm delivered its first figures since a disappointing flotation earlier this month.

The quarterly loss came despite a 20% rise in revenues to $3.1bn and increase in monthly active users to 93 million.

The results were in line with many analysts’ forecasts and may provide reassurance about the company’s future profitability.

Uber shares have sunk almost 11% since it listed on Wall Street on 10 May.

The company is the biggest of a group of Silicon Valley start-ups that have gone public this year against the backdrop of a global stock market sell-off sparked by renewed US-China trade tensions.

But Uber has also faced strong competition in the smartphone ride-hailing business, and incurred extra costs for signing up new drivers and establishing the Uber Eats delivery service.

‘Long journey’

Finance Chief Nelson Chai said he had recently seen some less aggressive pricing by competitors, which include arch rival Lyft.

He added that Uber was prepared to keep spending. “We will not hesitate to invest to defend our market position globally.”

The company has ambitions to move into electric scooters, e-bikes, and even aircraft, allowing people to hail rides via their smartphones.

During a conference call after publication of the results, Uber boss Dara Khosrowshahi said the company’s disappointing start as a public business was just a step on “the long journey of making Uber a platform for the movement of people and transport of commerce around the world at a massive scale”.

Short sellers

The share price was almost flat in after-hours trading immediately following release of the numbers, but then jumped 1.6% higher before falling back.

Some analysts have expressed unease about the company ever making a profit. The number of investors betting that Uber’s share price will fall – called short-selling – has risen during the past two weeks.

One analyst, Atlantic Equities’ James Cordwell, said a lack of any forward guidance in Thursday’s statement “is a little disappointing”.