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Is this the end of Uber? The innovative service is under stress

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Is this the end of Uber? The innovative service is under stress
April 17
10:00 2017

The company Uber was founded in 2008, since the founding (according to the information published by The Wall Street Journal), more than 15 billion US dollars of investment have been attracted. The company chose a rather aggressive strategy of conquering the market, which always needs serious financing. According to experts, the company has no more than 7 billion at its disposal. Uber is difficult to call successful despite the impressive growth performance (the total cost of travel increased by a third in the last quarter, the annual gross revenue is estimated at 20 billion).

The fact is that the international company has recorded a loss of $ 2.8 billion US dollars for 2016. In fact, this figure is even bigger, since the report did not contain dividend payment, the costs of the car park expanding as well as financial losses in China. Bloomberg reported that disappointed with the prospects of the Asian market, Uber had sold its Chinese division to the main competitor in that market segment – Didi Chuxing Technology Co.

Depressive forecasts are also confirmed by a number of administrative and legal failures. The President of the company Jeff Jones has resigned, the company has lost the Head of the Public Relations Department Rachel Whetstone. Uber will probably leave the Danish and Italian markets because of the conflicts with the authorities. The company will also have serious problems due to the accusations from the corporation Google about the technology theft.

We hope that Uber will remain on the market; the service is very customer-oriented and, therefore, it should live and flourish.

 

The material was prepared with the participation of  Vladimir Haritonov,
a leading analyst of the brokerage company VOSPARI.

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