Uber
Uber revolutionized the way people get around. The ride-sharing app was launched in 2009 and was valued at $8.1 billion when it went public in 2019. But when Uber filed its IPO, it said that it might never make a profit — despite the fact that it had 91 million users, Reuters reported.
Why Uber Isn’t Profitable
Public scandals and increased competition have made it hard for Uber to attract and retain riders in recent years, and the company stated in its filing that it expected its operating expenses to “increase significantly in the foreseeable future.” Its operating costs amounted to over $3 billion in losses in 2018.
Uber’s slowing growth might make it difficult for the company to ever turn a profit, some experts believe. Revenue growth and gross bookings have been on the decline, while the net cash used in operating activities has increased exponentially.
“You can get away with these large losses when the growth rates are quite high, because many of your expenses, of course, are investments in the future,” David Wessels, adjunct professor of finance at Wharton, said in a Knowledge @ Wharton blog post. “But in this particular case, it’s just bad news when the numbers are so low.”
