Uber Technologies Inc, the parent US company that operates the ride-share cab service Uber is facing a lot of questions over its immediate future following a series of events. Its IPO did not do well, and the share price of the company has been on a downward spiral falling 27% within a short span of time. The company has announced a series of job cuts. Now, the second quarter loss of $5.2 billion has everyone sitting up and asking tough questions.
Uber’s CEO Dara Khosrowshahi has now promised to set things right and see that the company makes profits and interestingly he says he will rely on emerging markets like India to achieve his objectives. According to him, the main business of app-based ride-share operations is close to becoming profitable as a standalone venture. There are other segments, like the food deliver business Uber Eats. Khosrowshahi says even this business is gaining momentum and can be built upon. The company is now entering a new segment Uber Works, a listing service for temporary workers.
Khosrowshahi may sell the new models of the core business like offering two-wheelers and three-wheeler rides within the Uber app as the next big thing to the company’s shareholders. The CEO believes this business has a great potential to grow in India and then can be replicated in other markets in Asia and Africa and that could become the real turning point for making profits, going ahead.
The more challenging issue the cab aggregators are facing in some countries and states within the US market is with regard to the status of the drivers who run the cabs under their banner. It is not Uber alone that will be affected if these governments or the regulatory authorities insist on or enact laws to make the drivers “employees” of the ride-share companies. At present they are only classified as independent contractors. Right now companies like Uber and Lyft are just keeping their fingers crossed.
Uber is backed by the SoftBank Group of Japan as a key investor.
