In early 2017, we brought you the rumour that Uber, the ubiquitous ride-sharing app was planning a float. Since then it has been nothing but sunshine, lollipops and rainbows trouble for the App and after what can only be described as a difficult year, Uber’s stock has fallen somewhat and an IPO may appear further away than ever before.
However, according to latest news, the company is still planning on a float, with Dara Khosrowshahi preparing the company to go public in 2019. The company has recently appointed Barney Harford as its new – and first ever - COO with the intention of bringing “a dose of financial discipline” to the company which has suffered severe losses for several quarters in a row, including a loss of $1.5bn in Q3 2017.
According to an interview he gave to the Financial Times, marketing costs and ride efficiency could be two of his targets to help reduce costs. Despite the troubles the company has faced this year, Harford revealed that by the year’s end, Uber will have handled over 4bn rides, a figure which is greater than the number of passenger airline trips taken globally for the first time. There is then, little trouble for Uber to attract business, it is other areas of the business and other issues that have made 2018 so tough for the San Francisco-based startup.
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Harford joins his friend and ex-colleague Dara Khosrowshahi at Uber and has already stated that he hopes to help the company achieve “a break from the past in terms of how we are doing business”.
As outlined above the high marketing costs will likely be tackled with a reduced local autonomy potentially removing many of the promotions and subsidies that have previously been managed by local agents. Instead of focusing on the “short-term sugar high” of previous marketing campaigns and offers which brought in new customers, Harford will look at deals to increase loyalty of both drivers and customers to follow a longer-term growth strategy.
Uber currently operates in 600 markets and has previously given a lot of autonomy to local managers. Harford believes that greater levels of standardisation, both in terms of budgeting and services will also help cut costs. Therefore, in addition to the optimisation of the marketing strategy, the company will seek a better transportation service and fewer dropped rides.
It remains to be seen whether or not Uber will reach its target of going public in 2019. Recently the company has seemingly suffered no end of defeats and bad press, yet user numbers and overall number of rides taken continue to increase. While this continues, the company certainly stands a chance in keeping investors interested.