Uber practically wrote the playbook for raising and burning through billions of dollars in venture capital in search of rapid growth around the world. Now, the company recognizes it needs to change its approach and stop bleeding money.
On Thursday, the ride-hailing company reported losing $1.1 billion in the final three months of 2019, driven in part by stock-based compensation. In total, Uber lost a staggering $8.5 billion in 2019.
“We recognize that the era of growth at all costs is over,” Dara Khosrowshahi, Uber’s CEO, said in a statement with the earnings report. “In a world where investors increasingly demand not just growth, but profitable growth, we are well-positioned to win through continuous innovation, excellent execution, and the unrivaled scale of our global platform.”
On a conference call with analysts Thursday, Uber executives bumped up their expectation for achieving profitability, excluding certain costs, to the end of 2020. Previously, the company had said it expected to be in that position by 2021.
Uber has lost $1 billion or more in each quarter since it went public in May, including a massive loss of $5.2 billion – its biggest ever – in the second quarter of 2019, about $3.9 billion of which was related to IPO expenses.
The company’s fourth quarter loss represented a 24% increase from the same quarter a year earlier. But the company is seeing revenue growth accelerate. Uber posted revenue of $4 billion during the fourth quarter, a 37% increase from a year earlier.
Uber has struggled to win over investors who are concerned about the company’s history of steep losses and its ability to eventually turn a profit. Shares of Uber rose 2% in after-hours trading Thursday following the release of the earnings report, but continue to trade below the company’s IPO price of $45.
Meanwhile, Uber’s high stakes bet on meal delivery, its Eats business, continues to be a costly pursuit. Eats saw revenue growth of 68% to $734 million, with losses of $461 million. In January, Uber announced it sold off its food delivery business in India to food app Zomato in an all-stock deal. On the investor call, Khosrowshahi referred to the deal as one example of the company’s “strategic discipline.”
As the company faces pressure to clean up its finances following its lackluster Wall Street debut, the company has gone through several rounds of layoffs since its IPO, cutting more than 1,100 positions across various departments.