Uber Faces a Loss of Over $3 billion in 2016. According to reports, Uber’s losses for the financial year 2016 are likely to climb up to $3 billion as compared to $2.2 billion last year. Regardless of posting these massive losses, Uber’s profits is continually increasing due to growing assurance of financiers and rapid worldwide growth.
Uber’s net profits is expected to surge to $5.5 billion as compared to an estimated $2 billion last year. So it will certainly come as a shock initially that Uber can register such massive losses. But taking a closer look at Uber’s financials can clarify this inconsistency.
Uber Faces a Loss of Over $3 billion in 2016
At present Uber is in the process of going up globally. Therefore it is spending a grand amount of money to foyer for licenses, detect the race, employing new drivers and much more.
Uber is debatably the economical option in the Pakistani market as well. Proposing such huge concessions to customers and giving the drivers in full will assuredly inlay the revenues of Uber. The company has also expended money guarding itself in numerous proceedings filed by drivers around employment arrangement and more.
Besides this, Uber is also spending a huge sum of money in its Research and Development department. Self-Driving cars, flying taxis and much more. These assignments are guaranteed to take a toll on expenditures and are yet to return any financial consequences.
Uber is spending almost a $1.55 for every dollar it earns. This approach of spending extra what it earns is not overlooked in the tech world. Amazon also has an extensive history of not posting any revenues and yet it is one of the most prosperous companies in the world. The success of Uber depends on the self-reliance of its supporters. As it is still technically a startup and hasn’t gone communal, it is raising most of its money by subsidy from different investors.
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