Uber reports an adjusted EBITDA loss of $2.7 billion for the full year in 2019 but aims to achieve profitability one year from now.
In its previous earnings call, the company selected the end of 2021 as its original profitability target.
“Our progress in 2019 and our 2020 plans gives me the confidence to challenge our teams to accelerate our EBITDA profitability target from full-year 2021 to Q4 2020,” says CEO Dara Khosrowshahi.
“It's important to emphasize that we plan to achieve this profitably target, assuming only modest improvements in the current competitive environment and without the assumption of any significant changes to our current portfolio businesses.”
During the earnings call, Khosrowshahi clarified that “there may be short-term bumps one way or the other” and the company “will deal with them.”
“We are assuming a world that doesn't change significantly, and we're challenging the team internally to get to profitability.”
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Revenue increased 37% year-over-year to $4.1 billion in the fourth quarter, and gross bookings rose 28% year-over-year in the same period from $14.1 billion to $18.1 billion.
Uber grew its monthly active platform consumers by 22% from 91 million to 111 million in the fourth quarter, but at a slower rate than the 26% increase in the previous period.
Across segments
The San Francisco-based ride-hailing company posted an adjusted EBITDA loss of $615 million in the fourth quarter across all segments.
As in the third quarter, Uber’s core rides business was the lone segment to achieve a positive EBITDA.
Adjusted EBITDA for rides shot up a whopping 281% year-over-year from $195 million to $742 million.
Meanwhile, Uber Eats has become the main loss leader, posting an adjusted EBITDA loss of $461 million.
To improve its struggling Uber Eats segment, the company terminated operations in South Korea in September 2019 and offloaded its business in India last month to Zomato.
Khosrowshahi says he expects the adjusted EBITDA losses to decline in 2020.
Legal headwinds
Uber has survived several legal challenges recently, most notably a lawsuit involving New York City’s imposed cruising cap and a successful ruling on employment statuses in Brazil’s highest labor court.
However, its toughest legal battles are advancing.
London’s transport regulator divested the company of its operating license in November 2019, and Uber is appealing the ruling to get it back.
“Two years ago in court, we won the right to operate in London,” says Khosrowshahi. “I think that our safety levels, our service levels are across the board significantly improved versus where they were two years ago.”
Meanwhile, California’s Assembly Bill 5, which just went into effect in January, could force Uber to reclassify its drivers as employees instead of independent contractors.
In order to comply with the new law, the company recently experimented with a new feature in which some California drivers could set their own fares.
“We're continuing to work in a positive collaborative manner while at the same time defending the interest of drivers, riders and others who rely on the Uber platform,” says Khosrowshahi.