I think this graph neatly summarizes the concern at this point. There are few signs that the business can live up to its existing hefty valuation, not-to-mention the even-loftier IPO expectations.
Amazon was also famously unprofitable as a public company for a long, long time. But they still had revenue growth rates worth investing in and potentially more defensible businesses.
I do wonder if the ride-sharing business will wind up like the airlines business: valuable, booming but very, very tough to consistently make large profits.
Rather, how the airline business used to be, before it consolidated down enough (in the US). Now it's a goldmine of consistent profit compared to what it used to be.
Delta - the world's most profitable airline - generated $24 billion in operating income over the prior four fiscal years; $3.3b in the last two quarters. Not impressive compared to certain tech giants, however still excellent operating profitability given the history of airlines. The major US airlines are of course domestic focused, so the corporate tax cut took them all from ~35-40% rates down to closer to 20%, further bolstering their bonanza.
It's why Warren Buffett bought ~10% of all of them (Berkshire owns 9.2% of Delta, 9.7% of American, 9.8% of Southwest, 9.8% of United). He perceived that the market had permanently shifted due to consolidation. The airlines have become more like the modern railroads, going from brutal competition to stable oligopoly and consistent profit machines.
Last four years operating income:
Delta: $24b, American: $23b, United: $17b, Southwest: $14b
Uber just has very deep pockets compared to other companies that used this model (e.g. Movie Pass).
Their losses are growing. Growing revenue is important as a route to profitability, but if you are heading the other way despite growing revenue...
It's also a strange world where you need significantly more than 38% growth just to stop losing money while still valued at $50 billion.
Also, that revenue growth is half of what it was 6 months ago, which is the dramatic slowing referenced.
On the other hand, they are operating at a loss so increasing revenue just means they spend more money paying costumers to ride with them or eat with them. Only founding would limit the revenue growth when you are giving away stuff.
Enough that their losses get smaller, rather than bigger.
63% revenue growth between Q2'17/Q2'18, 38% between Q3'17/Q3'18.
If my own 9 year old company was growing 38% YOY I think I'd be very very happy.