Uber narrows losses but revenues miss forecasts in fourth quarter

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Uber Technologies Inc (NYSE:UBER)  reported narrowed losses in the final quarter of 2020, but revenues fell short of market forecasts despite signs of a recovery from the effects of the coronavirus (COVID-19) pandemic.

In its results for the three months to December 31, the ride-hailing and food delivery firm reported a loss of US$968mln, or a US$0.54 loss per share, narrowed from a US$1.1bn loss a year ago, while revenues fell to US$3.17bn from US$3.75bn, lower than the US$3.45bn predicted by analysts.

READ: Former Uber CEO backs firm developing real-time carbon emissions tracking technology

Uber also reported that gross bookings had fallen 5% year-on-year to US$17.2bn as a 47% decline in ride-hailing gross bookings offset a 128% surge in gross delivery bookings on its UberEats platform.

Despite the ongoing losses, Uber chief executive Dara Khosrowshahi said the company had “dramatically accelerated” its capabilities in local commerce during 2020, highlighting that its delivery business has more than doubled over the year.

“With two global businesses stitched together by world-class tech and increasingly valuable membership programs, we are more focused than ever on making people’s lives a little bit easier—helping them go wherever they want and get whatever they need”, Khosrowshahi said.

Nelson Chai, the firm’s chief financial officer, added that the firm’s acquisitions over the year of businesses such as Cornershop and Postmates as well as divestments from others like ATG and Jump had “resulted in a much more focused and ultimately stronger company”.

Chai said the business also remains “well on track to achieving our profitability goals in 2021”.

‘’Uber’s bumpy ride through the pandemic is showing signs of becoming a smoother journey with demand for Uber Eats deliveries continuing to rise, though still not offsetting the sharp decline in driver bookings…Like its main US ride-sharing rival Lyft, Uber will be counting on vaccine roll outs to significantly scale up in the coming months to bring business back to the platform”, said Susannah Streeter, analyst at Hargreaves Lansdown.

“However it’s not just what Uber has achieved, but its vision for the future that appears to have kept many investors interested in owning the stock. Uber is navigating spaghetti junction and shifting gears all over the place as it aims to use its technology to corner the markets in everything from food and freight deliveries to green transport and even access to healthcare via its ride service for patients. With its fingers in so many pies, Uber will no doubt face further regulatory hurdles as it continues its drive for dominance connecting people, products and services around the world”, she added.

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