Uber is in the process of reducing its deficit but still managed to lose $1.1 billion in the fourth quarter of 2017, The Information reported earlier this week, citing data obtained from the company. The San Francisco, California-based firm narrowed its quarterly loss by 26-percent sequentially, whereas its revenue rose 14-percent to $11.1 billion in the final three months of 2017. While Uber is still on the path of massive growth, the main reason why its revenue now continues to outpace its losses lies in the firm's aggressive cost-cutting efforts spanning various departments; in Q4 2017, its core operating expenses excluding one-time costs amounted to 15.6-percent of its gross revenue whereas nearly a quarter of its Q4 2016 revenue went directly into settling such expenses.
The ride-hailing service provider is now spending less on customer support and advertising, though the former unit is still understood to be performing in accordance with the company's expectations, i.e. it's effectively managing to do more with less. Over the entire 2017, Uber lost $4.5 billion, whereas it was "only" about $2.8 billion in the red a year earlier, though 2016 isn't considered an optimal reference point for evaluating its long-term performance because the majority of its losses incurred over that year was amortized by the sale of its China business to local rival Didi Chuxing. The value of the merged entity was then estimated at around $35 billion, with Uber receiving an equity payment equivalent to the fifth of the combined company.
The firm's annual gross revenue surpassed $37 billion in 2017, marking a significant, 85-percent increase compared to $20 billion recorded in 2016. Uber Chief Executive Officer Dara Khosrowshahi and its stockholders are reportedly focused on the company's EBITDA losses which shrank from $607 million in the third quarter of 2017 to $475 million over the final three-month period of the calendar year. According to the startup's management, EBITDA performance is one of the best indicators of Uber's overall improvement and is something that the company will continue pursuing as it draws closer to profitability. The startup that's targeting an IPO next year is likely to begin making money by 2021, according to Mr. Khosrowshahi's recent predictions. Uber is presently more stable than it has been at any point last year, having recently concluded one of its last remaining controversies by settling with Waymo as part of a trade secret theft case some legal experts have described as "a Tom Clancy novel."