Uber's Q3 losses increase to $1.46 billion while rival Lyft sees revenues triple: Reports

Bookings and net revenues though continued to grow for the ride-hailing major.

  • Published: December 1, 2017 10:12 AM IST

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.

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.

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.

  • Published Date: December 1, 2017 10:12 AM IST