Uber adds more services to its app in its quest for profit | TribLIVE.com
U.S./World

Uber adds more services to its app in its quest for profit

Associated Press
1727831_web1_1727831-ddd421eda0f24c5e81d4ffabe5a5adfa
AP
Dara Khosrowshahi, CEO of Uber, speaks at the Bloomberg Global Business Forum in New York on Wednesday, Sept. 25, 2019.

SAN FRANCISCO — Uber is cramming more services into its ride-hailing app as it explores ways to generate more revenue and finally turn a profit.

The makeover announced Thursday includes force-feeding its food delivery service, “Eats,” into the Uber app that millions of people use to summon a ride. That means Uber users who don’t already have the “Eats” app may now be asked whether they want to order some food in the ride-hailing app.

Uber also will start making other changes to the ride-hailing app as part of its effort to create an “operating system for life,” according to company CEO Dara Khosrowshahi.

“This is a big change for us, but we, as a company, have never been afraid of big changes,” Khosrowshahi said.

Although Khosrowshahi didn’t mention it, Uber is under intensifying pressure to start making money. With the exception of when it has generated a windfall by selling a part of the company, Uber has done nothing but lose money since its inception, while also pioneering a way for people to easily find someone come pick them up at prices that undercut traditional taxis.

With its losses still mounting, Uber’s stock has plunged by nearly 30% since pricing its shares at $45 apiece when it became a publicly held company in May . The stock gained 8 cents to $31.76 in Thursday’s afternoon trading.

In an effort to reverse its losses, Uber has been gradually raising the cost of rides and becoming more aggressive it its attempts to plumb new sources of revenue. That has included food delivery and helping passengers find other means of transportation on bikes and scooters.

Uber Eats has proven popular, with revenue surging 80% during the first half of this year to $1.1 billion. But Uber remains mired in a morass of red ink, with losses of $6.2 billion during the first half of this year.

Most of that setback reflected nearly $4 billion in employee stock compensation that it had to record as part of its initial public offering, but even without that accounting expense, the San Francisco company still isn’t close to making money, much to the dismay of investors.

So, Uber will be rolling out a new menu of services in its ride-hailing app. It has already been testing the concept among some users in the U.S., Europe and Australia within the ride-hailing app’s map section, but now it will create a new gateway at the bottom of the app. Users of the ride-hailing app will get the new services feature, whether they want it or not, according to the company.

Eats will be included in the newly created menu, and at times Uber may ask a user if they want to order some food from a nearby restaurant participating in the service. Depending on user reaction, Uber may add other services, such as a supermarket delivering groceries.

In a recent research report, HSBC analyst Masha Kahn predicted Uber also could team up with department store chains, banks and digital subscription services with a variety of offers served up through the ride-hailing app.

Even if Uber is able to bring in more revenue with a new range of services, it still may face a long road to profitability. It still faces a number of concerns about the safety of its services, and California recently approved a new law that could force it to end its practice of classifying its drivers as independent contracts and treat them as full-time employees instead. That could require Uber to begin paying a variety of new benefits that would dramatically increase its expenses.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.