Uber and Lyft, the two leading ride companies, announced that their quarterly results showed significant losses which are far bigger than the size and global spread of their businesses.
With the disappointing results, the company’s CEOs and shareholders said that the two companies have planned to reduce the promotions and special rates granted to their customers.
In the first quarter of 2019, Lyft recorded a loss of $ 1.1 billion as a result of heavy competition related to its initial public offering, which may mean that its losses this year may exceed that of last year.
Uber Chief Executive Officer Dara Khosrowshahi said that they are focusing on improving profitability, pointing out that the market is currently witnessing stability.
Yet, Uber’s financial disclosure showed that its quarterly revenues were affected by about $ 300 million in drivers’ bonuses and $ 2.9 billion in public offering expenses, such announcement resulted in the drop of its shares by about 7%.
However, Khosrowshahi continues to be optimistic, saying that Uber is now growing faster in richer areas where customers can afford higher prices. Nonetheless, the company is likely to witness a drop from rides in neighborhoods with poorer populations.
Uber and Lyft have been offering discounts and coupons since their launch for their app users, relying on an aid which was funded with huge amounts of risk capital and it continued that way as long as investors were willing to provide more funding. However, it now seems that such policy will come to an end and the two companies will eventually resort to increasing their prices.