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Uber CEO Dara Khosrowshahi plans for 2019 to be the company’s peak year for losses and says the company should be compared to Amazon’s rise.
“That would be our intention, although there can’t be any guarantee,” Khosrowshahi said of Uber reaching peak losses this year. He spoke in an interview with CNBC’s Andrew Ross Sorkin on “Squawk Box” Friday ahead of Uber’s market debut.
Three days earlier, on their first earnings call, executives of rival Lyftalso said 2019 would be their peak year for losses, leading several analysts to raise their price targets on the stock.
Like Lyft, Uber’s path to profitability has been a key area of concern for analysts as the company prepared its IPO. Amid speculation of its ability to turn a profit, Uber’s market cap has fallen from lofty expectations as high as $120 billion, according to early reports, to $75.46 billion on a nondiluted basis based on its IPO price of $45 per share.
In its IPO filing, Uber posted an adjusted EBITDA loss of $1.85 billion in 2018. But Uber executives have leveraged its losses as a way to compare the company to another infamously unprofitable company at its IPO: Amazon. Uber’s financials still look different from Amazon’s at its IPO. As Uber prepared its debut, it was a much bigger company than Amazon was and already has slowing revenue growth. But Khosrowshahi said in his CNBC interview that he stands behind the comparison.
“It’s a fair comparison at the wrong time,” he said. “So a lot of private companies now are holding off much longer before they go public. We are much bigger, much more mature as a company as we go public, and if you do look at the growth rates, our audience is growing 33% on a year on year basis, transactions are growing 36%. To be able to grow transactions 36% on a $50 billion base is pretty incredible, and we hope to keep it going.”
Source: CNBC
