Uber won't turn profitable for years CTO

Ride-hailing company Uber will begin to become profitable after at least “a few years”, CNN reported, citing the company’s chief technology officer (CTO) as saying.

The San Francisco-based ride-hailing firm has “local competitors everywhere trying to aggressively expand to grow their business, and [the company has] to compete vigorously,” Thuan Pham added at a tech conference in Hong Kong on Tuesday.

Uber cuts its fare prices in more than 700 cities where it operates in a bid to beat rivals such as India’s Ola and China’s Didi Chuxing.

During the first quarter of 2019, the ride-hailing company incurred losses of more than $1 billion and is forecast to continue losing billions until 2020, according to analysts surveyed by Refinitiv.

Pham expected ride-hailing companies in mature markets such as the US, where competitor Lyft has also floated its shares on the stock market, to begin to be profitable.

Still, even when Uber becomes profitable, it won’t have a huge profit margin as the company’s business model “is more like Amazon, where [it has] lots of transactions and maybe make a few pennies per transaction,” he added.

Uber pins its hopes on autonomous cars, focusing its funds on developing the required software, as its self-driving car unit obtained $1 billion in fresh funds in April.

“When that technology works, that's when price point will drop significantly, and then the market will expand much quicker. And [Uber has] an active effort on that technology,” Pham pointed out.