Uber Technologies Inc is now considering itself making profits a year earlier from its initial target. On last Thursday, the ride hailing firm came announcing that it is expecting becoming profitable in fourth quarter of current year. The company was previously announced the last quarter of 2021 to become profit making firm. But the company is still expecting losing over $1 billion in 2020.
On the news day, stock price saw an increase of 5% in after-hours trading. Chief Executive Officer Dara Khosrowshahi shared the route map with intentions of cutting costs. The plans of generating more revenue from the repeating customers and putting more efforts to widen the customer base for its premium ride services is also in consideration.
Khosrowshahi unveiled the company’s new profitability goals in a conference call with investors after the company reported results for quarter ended December 2019.
Khosrowshahi also discussed the plans of making the firm’s food delivery business, Uber Eats, as more dominating player in the markets around the world. And that would be achieved by accelerating the segment’s growth, which is currently setting off most of the firm’s performance. The segment is eventually being increasing the company’s profit margins, he added.
In the fourth quarter, Uber still came losing money but succeeded to increase its number of customers.
For all the commitments, the responsibility is now on company’s management to fulfill them, said James Cordwell, an analyst at Atlantic Equities.
At the time of announcing the third quarter results in November, Uber made commitment of becoming profitable by the end of 2021 on an adjustment basis, excluding stock related compensations and expenses for other items.
In the Q4 2019, increase in its active users to surpass 111 million mark helped Uber to report boosting revenue, but effect of that was mostly hit by the higher operating costs in Uber Eats to better compete rivals.