Uber meets estimates but rising costs eat into profit
Uber continued to draw more customers in the fourth quarter but high costs at Uber Eats means it continues to lose money.
The company’s fourth quarter revenue met Wall Street’s estimates, rising 36.9 per cent to $4.07bn (£3.15bn). It was in line with analyst expectations of $4.06bn.
It was aided by an increase of monthly active users to 111m globally, in line with estimates of 110.7m.
However net losses widened to $1.1bn (£850m), up from a loss of $887m (£686m).
Uber’s total costs rose 25.2 per cent to $5.04bn (£3.9bn) in the quarter as it spent heavily on the expansion of its food delivery service.
Revenue at Uber Eats grew nearly 14 per cent on a quarterly basis but it continued to lose money as it tries to outspend competitors.
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Three-quarters of Uber’s revenue came from its ride-hailing service and on its own would already be profitable.
Uber also increased spending to attract drivers with promotional incentives outpacing the segment’s revenue growth.
Last November Uber said it would be profitable on an adjusted basis by the end of 2021 after it booked a more than $1bn loss in its third quarter earnings.
It also promised to exit markets where it could not become the dominant food delivery service.
In January it sold its business in India to competitor Zomato, in exchange for a stake in the startup.
Shares were up more than eight per cent in after hours trading.