Ride hailing company Uber may be running losses and burning cash but its CEO Data Khosrowshahi stated that it is likely to become profitable within the next two years. In a recent press interview Khosrowshahi stated that it will soon become profitable on adjusted EBITDA for the year 2021. Khosrowshahi said that though their plan has still not been finalized it will require hard work from employees to reach the required figure by target deadline of 2021 and there is lot of expectations on them to deliver by that time. The firm’s revenues were at $3.81 billion though expectations were just $3.69 billion. His comments came just after Uber reported its third quarter earnings with net losses of around $ 1.6 billion. The losses included $401 million of stock based compensation. On an analysts call Khosrowshahi stated Uber is focusing on driving rates lower on the basis of best technology available instead of driving growth through discounts.
This news set its stock crashing by 5 percent in extended trading even though the overall top and bottom lines of its earnings were better than expected. The firm is under strong pressure from Wall Street to start earning profits as investors are becoming more and more skeptical about technically strong companies that are bleeding money. Its closest rival Lyft announced during last week that it is likely to be profitable on adjusted EBITDA basis towards end of 2021. The stocks of both firms are trading several levels below their IPO price of last year. Though the firm’s losses are staggering CEO Khosrowshahi called attention to rides segment of Uber that grew by 19 percent from an year ago to $2.9 billion. He stated that Uber’s rides business pays for complete corporate overhead of the company and this trend can be continued in future too.
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