Will Uber Become Profitable?

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Despite the bombastic lead up to their IPO, Uber still isn’t turning a profit.

Uber has been leading the way in ride-hailing for years now. Despite this, every time you use the Uber app, the company loses some money. While Uber has been something of a trailblazer, the company is still not making a profit as their IPO takes off.

Uber went public last week in what was one of the largest IPOs in history. At the same time, it has been revealed that Uber spent over $3.2 billion on advertising in 2018 alone, and their expenses have been through the roof for some time now. The company’s long road to the IPO has been riddled with all sorts of problems, but the build-up for this IPO has come at a serious financial cost to the ride-hailing giant.

Uber has been spending massive amounts of money on advertising for years. The $3.2 billion spent on advertising in 2018 was a 25% increase on 2017’s advertising expenses. 2017 in particular saw a few PR crises which really set the company back, and outreach has been important to Uber for a long time. While Uber’s advertising expenditures doubled from 2016-2018, revenues have consistently failed to keep up with expenditures.

The real challenge which Uber will have to face before becoming profitable is one surrounding PR. Don’t take our word for it, though, as Uber divulged the same information to its investors leading up to the IPO. The message was simple: going forward, Uber will need to work hard on fostering a better reputation for itself in order to best serve its investors. This is where the answer to the question of Uber’s profitability lies.

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5 years ago
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