Uber Technologies Inc chief executive officer Dara Khosrowshahi vowed to get his company to profitability while pursuing growth from emergent arenas such as India, addressing investors’ concerns about the ride-sharing company’s mounting losses and global regulatory challenges.
Uber, which lost about $5.2bn in the second quarter alone, is having a tough time convincing the market of its growth potential, or that it can turn a profit anytime soon. Its stock has plummeted 27% since a disappointing initial public offering in May.
Khosrowshahi, who this month unveiled a final round of job cuts, said the core rides business would achieve profitability even as newer lines such as Eats gained traction.
Dara Khosrowshahi Khosrowshahi was brought in to clean up the ride-sharing company in the summer of 2017, after a series of scandals brought down flamboyant co-founder Travis Kalanick.
It had already become one of the world’s most valuable startups by aggressively pushing into new markets, bringing its model to places where few rules existed to deal with the emergent phenomenon of ride-hailing.
Now, Uber is advancing at a more even clip after exiting markets such as China, expanding existing business lines while exploring new markets. The company will soon roll out Uber Works, a listing service for temp workers of all stripes.
“If I rated myself based on accounting of the last quarter, I wouldn’t be doing so well.
But I live in the real world,” Khosrowshahi said, seated in a conference room sporting a bright-red Uber-monogrammed Indian silk waistcoat.
“I ran Expedia for 12 years. It was a profitable company with significant cash flows,” Khosrowshahi said at Uber’s engineering centre in Bengaluru, which was decked out with oil lamps and sheer orange drapes for Diwali, the upcoming Indian festival of lights.
Uber’s take rate, or commission earned, in rides was over 20% and “a great business can be built with a 20% take rate.”
Uber is one of the most prominent companies in the portfolio of SoftBank Group Corp, the Japanese investment powerhouse that also backed WeWork and former rivals such as Didi Chuxing.
The US company, once a star in the SoftBank constellation, is now labelled among its biggest under-performers. India is a potential bright spot: a massive, untapped market where Uber can demonstrate rapid growth to calm investors back home.
It’s also a laboratory for innovation, the chief executive said.
Khosrowshahi says Uber will continue to invest there, and is confident his team can build products that fit not just the Indian market but could also be exported to growth regions of the next decade from the Middle East to Africa.
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