Uber has had a tough year, and it’s not over yet. The ride-hailing major’s losses for the third quarter have widened to $1.46 billion as it struggles to ward off competition, lawsuits and regulatory attention. That is a significant 38 percent increase in losses over Q2. This comes in the wake of SoftBank doling out a $10 billion offer to Uber in exchange of a minority stake a move that is expected to usher in better times at the firm. Uber’s numbers were disclosed to shareholders as part of a formal bid from the SoftBank-led consortium, Bloomberg reported. Also Read - Uber cab service resumed in 31 cities in India with new Lockdown 4.0 guidelinesAlso Read - Uber launches 'Uber Connect' package delivery service to rival Dunzo and Swiggy Genie
While Uber was earlier valued at $69 billion, SoftBank is said to be buying stock from existing shareholders at a 30 percent discount, thus lowering Uber’s valuation to $48 billion. One of Uber’s key early backers Benchmark Capital, which had an ugly fallout with founder Travis Kalanick, is willing to sell shares at a discount, thus making its exit plans clear. Besides SoftBank, China’s Tencent Holdings is also buying some of the stock, reports claimed. Also Read - Uber to operate 'Essential' cab service to hospitals and pharmacy stores in 4 cities
Despite deepening losses, Uber managed to grow its bookings and net revenues in Q3. Bookings increased 11 percent to $9.71 billion at the end of September, while net revenue for the period stood at $2.01 billion registering a growth of 21 percent. “Ride-hailing companies hold out the promise of creating a whole new industry, but it s tough to make judgments based on their fundamentals,” an analyst was quoted as saying. While Uber’s financials are struggling, it continues its hunt for a new CFO. In fact, for most of the third quarter, Uber was without a CEO after the unceremonious exit of Kalanick in June.
As Uber continued to be troubled, its biggest rival Lyft gained ground. Reports suggest that its revenues tripled this year to $483 million compared to $150 million a year ago. Losses narrowed as well from $283 million to $206 million. On a per ride basis, Lyft was losing $4 in 2016. Now, that’s down to $1.20. Lyft’s purple patch is believed to have come at the cost of Uber. As the latter stayed afflicted with scandals, legal concerns, and a largely negative public sentiment, Lyft made its moves and popularized its service in the US. Uber, which intends to go public by 2019, has a lot of mess to clean up still.