Investors recently told Uber it would be wise to sell off its self-driving car unit after losses of $125m to $200m each quarter for the past year and a half, according to Reuters.
This week Uber released its second-quarter earnings to investors. It reported a 51% annual increase in income from the taxi app side of the business but losses are growing rapidly around its expansion plans in areas for Uber Eats, its food delivery business and its bike sharing business.
Whilst income in its global taxi business, after payment to its drivers rose to £2.1m in the last quarter, Uber say adjusted losses in the last three months rose 32% on the previous quarter to $404m.
Uber chief executive, Dara Khosrowshahi, said the company was “continuing to grow at an impressive rate for a business of our scale.”
“We’re deliberately investing in the future of our platform: big bets like Uber Eats; congestion and environmentally friendly modes of transport like Express Pool, e-bikes and scooters; emerging businesses like Freight; and high-potential markets in the Middle East and India where we are cementing our leadership position.”
In May at a conference in California Mr Khosrowshahi said the food delivery business Uber Eats was taking $6bn bookings a year and growing 200% annually.
Uber is under pressure to become more profitable for a planned offering of its shares to the public next year.
David Brophy, professor of finance at the University of Michigan, told Reuters the firm could expect to see its valuation slashed in a public listing if it did not show more progress towards becoming profitable, putting Uber under pressure to become more profitable. It is planning to go public with share offerings next year,
Uber is a privately held company and a recent valuation, at $72bn, makes it one of the most valuable privately held companies in the world.
Figures released to investors showed that the firm made $12bn in quarterly gross bookings, which includes both rides and its food-delivery service, Uber Eats, up 41% from a year before.
Uber’s competition in places like China, Southeast Asia and Russia has seen Uber having to retreat from major markets and selling off some of its interests after failing to fend off local competitors.
But it said it was still committed to India and the Middle East, despite pressure from some investors to quit those markets too.
Regulatory pressure is also threatening to hinder growth in major markets.
The new Chief Executive, Mr Khosrowshahi arrived last year in the hope of reviving Uber’s image after a damaging sexual harassment scandal engulfed the firm.
There are still a number of ongoing costly legal battles to resolve, including over its classification of drivers as independent contractors, and federal inquiries to resolve
Only last week New York voted to impose a temporary cap on new licences for ride-hailing cars, to tackle congestion. In London, Sadiq Khan, London’s Mayor, said he would look at similar restrictions in the capital.
In a 39-6 vote, the New York City Council will pause the granting of new licenses for Uber, Lyft, and other ride-share companies for one year while a study is conducted by the Taxi and Limousine Commission (TLC) to determine the effects these companies are having on the city’s transportation industry. The legislation passed by the city also grants a new minimum pay-rate for drivers.
New York Mayor Bill de Blasio will sign the legislation which is expected to come into effect immediately and New York City Council Spokesperson Corey Johnsons said “We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation,” before adding that he does not expect the existing service for ride-sharing customers to diminish.
In a statement to Business Insider, Uber spokesperson Danielle Filson said,” We take the Speaker at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded. In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders, including Speaker Johnson, to pass real solutions like comprehensive congestion pricing.”