US-based Uber has just reported that the company made a massive $6.8 billion loss in 2020, but that’s actually good news.
The full-year loss, which Uber reported along with its fourth quarter results recently, represented a significant drop from the $8.5 billion it lost in 2019. During the year, Uber sold off costly ventures, cut staff and focused on what its CEO previously called “profitable growth.”
‘On track’ for profitability
The company reported $968 million in losses for the last three months of 2020, including $236 million in stock-based compensation expenses, down from nearly $1.1 billion in the year prior. Cheif financial officer of Uber, Nelson Chai said in a statement that Uber remains “well on track to achieving our profitability goals in 2021.”
Uber has said it aims to achieve profitability on an adjusted basis before the end of this year. Uber saw some improvement from the third quarter of last year but still experienced revenue declines due to the ongoing pandemic’s impact on its rise-hailing business. Uber posted revenue of $3.2 billion for the fourth quarter, down 16 percent from the same period a year earlier.
Uber has continued to lean on Eats, its food delivery business, which saw revenue increase 224 percent to $1.4 billion in the fourth quarter compared to the year prior. Rides revenue was $1.5 billion, down 52 percent from a year earlier.
Widening the portfolio
The company has worked to broaden its delivery portfolio in recent months. In July last year, Uber acquired one of its smaller food delivery competitors in America, Postmates, for $2.65 billion in an all-stock deal. Last week, the company announced it is acquiring alcohol delivery startup Drizly.
The acquisition spree comes as Uber has abandoned its more expensive ambitions. The company sold off its autonomous vehicles research division and its flying taxi operations in December.
Uber, which has a history of steep losses, has felt the effects of the pandemic. As the global health crisis put pressure on its core business, the company cut roughly 25 percent of its staff over multiple rounds of layoffs in the first half of last year.