Silicon Valley's leakiest unicorn is betting on cheaper rates, more drivers, and greater ride volume to make a profit. Losses for Uber, a professional contracting service, grew to $1.7 billion on $1.2 billion in revenue over the first three quarters of 2015 according to the Information, driving the business to once again lower its fares by 10 to 45 percent in 100 North American cities.
Bloomberg reports that it's the third consecutive year the company has done so in the month of January, citing anticipated seasonal slowdowns. But this time, as was the case last year in a third of these cities, the winter of driver discontent could last forever. Will prices ever rise again? Or will Uber wait until it completely dominates the market for that?
Uber, pundits say, needs North American profits in its bid to expand globally. At a company conference in Las Vegas at which Beyoncé performed, Uber's CEO Travis Kalanick predicted profitability was imminent. That was last September.
Uber currently pockets up to 30 percent of its drivers' fares, a figure that was 20 percent two years ago. Also, Uber continues to explicitly charge for the basic safety of its ride with a fee that has more than doubled from $1 to $2.50 in certain cities. Uber says that charge funds background checks and safety education, and other such add-on luxuries.
Lyft, too, has told shareholders it will lower its fares to maintain a semblance of competition. “With recent price changes from the competition, we need to take action,” Lyft wrote in an e-mail to drivers last week.