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Thursday 21 June 2018

Uber plunged deeper into the red in 2017, but hails signs of improved trading

The group saw losses widen to $4.5 billion (£3.3 billion) in 2017, compared with $2.8 billion (£2 billion) in 2016.

Uber saw annual losses balloon by 61%, but cheered a step towards profits in the final three months (Laura Dale/PA)
Uber saw annual losses balloon by 61%, but cheered a step towards profits in the final three months (Laura Dale/PA)

By Holly Williams, Press Association Deputy City Editor

Ride-sharing giant Uber has seen its annual losses balloon by 61%, but cheered another step towards profitability in the final three months.

The group saw losses widen to $4.5 billion (£3.3 billion) in 2017, compared with $2.8 billion (£2 billion) in 2016.

But it narrowed its losses in the last three months, to $1.1 billion (£795 million) from $1.46 billion (£1.1 billion) a year earlier.

The group also reported an 85% surge in gross revenues to $37 billion (£27 billion) from $20 billion (£14.5 billion).

Its fourth quarter improvement comes as a welcome boost for new chief executive Dara Khosrowshahi, who took over from ousted co-founder Travis Kalanick last year.

He hopes Uber will make an underlying profit by next year, ahead of a planned stock market flotation in 2019.

We're incredibly encouraged by our financial performance Uber spokesman

Uber’s full-year loss comes after a year of scandal for the group, kicked off by sexual harassment claims and eventually the departure of former chief executive Mr Kalanick and a host of senior bosses.

Meanwhile in the UK, Uber has been fighting to keep its service running in London.

Transport for London (TfL) stripped the ride-hailing firm of its licence last September, raising concerns over Uber’s approach to reporting serious criminal offences, how drivers’ medical certificates are obtained, how criminal record checks are carried out, and its use of technology which allegedly helps it to evade law enforcement officials.

Uber’s appeal against TfL’s decision not to renew its licence will be heard in the spring.

The group’s efforts to ramp up marketing costs in the US earlier in 2017 to rebuild its tarnished image and fight off increasing competition hurt its annual profits, pushing it deeper into the red.

Results were also impacted by a substantial gain in 2016 from Uber’s sale of its business in China.

But the fourth-quarter figures showed a marked improvement thanks to better control of costs such as advertising and customer support.

An Uber spokesman said: “We’re incredibly encouraged by our financial performance and excited by our long-term potential to serve riders, drivers and cities.”

Uber also recently secured $1.25 billion (£903 million) in investment after Japan’s SoftBank bought a 15% stake in the group, while a consortium of other investors – which reportedly include Dragoneer, Tencent, TPG and Sequoia – shelled out $1 billion (£722 million) for a 2.5% stake.

Press Association

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