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Uber losses top $1 billion on road to IPO

Uber continues to bleed money as it races toward a much-hyped public offering next year.Uber said Wed...

Posted: Nov. 15, 2018 4:09 AM
Updated: Nov. 15, 2018 4:09 AM

Uber continues to bleed money as it races toward a much-hyped public offering next year.

Uber said Wednesday that it lost $1.07 billion in the three months ending in September, up from an $891 million loss in the quarter prior, as the company invests in newer services ranging from food deliveries to scooters, according to a copy of the financials provided to CNN Business.

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Yet the spike in losses came as Uber's sales remained largely flat for the period. The ride-hailing company posted sales of $2.95 billion for the quarter, up about 5% from the prior quarter and an increase of more than a third from the same period a year earlier.

The latest results highlight the challenge Uber faces in trying to simultaneously manage its sizable losses while showing the kind of rapid sales growth that investors look for from a newly public technology company. Uber has repeatedly said it expects to go public in 2019.

Wall Street expectations may be particularly high for Uber. It is valued at around $70 billion on the private market, making it the most highly valued US startup. It could reportedly fetch a valuation of as high as $120 billion in its IPO next year.

"As we look ahead to an IPO and beyond, we are investing in future growth across our platform, including in food, freight, electric bikes and scooters," Nelson Chai, Uber's recently hired CFO, said in a statement with the results.

Like its chief US rival Lyft, Uber has jumped on the electric scooter trend in recent months. Uber launched fleets of electric scooters in Los Angeles and Austin, with more cities to come.

In its latest earnings release, Uber highlighted strong growth in its food delivery service, Uber Eats. Gross bookings for the service topped $2 billion for the quarter, a jump of more than 150% from the same period a year earlier. Last month, the company announced that Uber Eats would expand to cover 70% of the US population by the end of this year.

At a tech conference this week, Uber CEO Dara Khosrowshahi said he believes the company is "uniquely positioned" to build services that address a wide range of needs, beyond just hailing a ride.

"We can be your everyday Uber service, your everyday eating service in terms of breakfast, lunch dinner, and I think we can play a very big part in how freight is moved around this country and hopefully internationally as well," he said. "Each of those are enormous, trillion-plus dollar opportunities."

At the same time, Uber continues to play up its global ambitions. Chai says Uber invested in "high-potential markets in India and the Middle East where we continue to solidify our leadership position."

However, Uber has also ceded its business in Southeast Asia and Russia. And the company is facing scrutiny over its business relationship with the Saudi government in the wake of the killing of journalist Jamal Khashoggi.

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