Will Uber’s new ventures revive its sagging fortunes?

The ride-hailing giant has recently introduced ‘Uber Money’ & intends to launch ‘Uber Eats’ drones in the summer of 2020

Technology-enabled Gig economy champions like Uber have seen limited success as far as making any profits is concerned. The ride-hailing giant has been losing at an alarming rate and tide hasn’t stemmed even after the launch of its IPO in May of this year. Needless to say, this is not sitting well with the investors who are getting nervous.

It’s stock price closed at $27.38 today, down a whopping 39% from its IPO price of $45 bringing down its valuation from the initial $82.4 billion to $46.9 at the time of writing. Uber’s biggest competitor Lyft didn’t fare any better from when it went public back in March of this year. At market close today, it’s price had plummeted almost 40% from the IPO price of $72 with a market cap of $12.92 billion from the initial valuation of $28.2 billion.

Seems like Wall Street doesn’t take well to the idea of unprofitable companies (chart below). Consistent quarterly loss of over $1 billion by Uber is making the investors worried as they continue to dump the stock.

From Uber’s perspective, these are all part of growing pains for a startup. Earlier in March Uber had announced acquiring its Middle East rival Careem for $3.1 billion, thus establishing a strong footprint in an important & competitive region. The company is also extending its reach to financial services & automation to eventually drive the company towards profitability.

The first endeavor is a deeper push into financial services with the launch of a separate division called Uber Money. This would include the creation of a digital wallet & upgrading its debit and credit cards. The initial focus of this project would be to provide ts 4 million-plus drivers and couriers around the world access to a mobile account where they can track their earnings instantly after every ride.