The ridehailing giant told investors on Thursday that it'll turn a profit by the fourth quarter of this year, earlier than it had forecast previously. Uber shares were up 5% in after-hours trading.
For the December quarter, Uber posted a narrower-than-expected loss, at 64 cents versus the 68 cents per share expected by analysts. Its revenue came in slightly ahead of estimates, at $4.1 billion for the quarter, and gross bookings of $18 billion were in line with forecasts.
On a call with investors, Uber CEO Dara Khosrowshahi said that Uber will turn its losses into a profit by the end of 2020 -- ahead of its prior target of 2021.
“Our progress in 2019 and our 2020 plans give me the confidence to challenge our teams to accelerate our EBITDA profitability target from full-year 2021 to Q4 2020,” Khosrowshahi said.
For the past several months, Uber has sought to trim losses by undertaking cost-cutting measures, including laying off hundreds of workers, downsizing its self-driving car division and selling its Indian Uber Eats business to a local rival, Zomato. Uber also terminated its Uber Eats business in South Korea, saying that it will exit markets that no longer make financial sense.
Uber executives described such changes as eliminating "empty calories" in the business. And in 2020, part of Uber's challenge is to balance bottom-line improvements without sacrificing demand in its core ridehailing business.
"We do think that we've got some pricing power and we are putting that pricing power in careful way into the markets," Khosrowshahi said, adding that Uber is investing in premium products and newer initiatives such as bikes and scooters.
"I think our shared Rides business will continue to grow because we're growing based on improving the efficacy of the matching algorithms versus just growing through pricing," he continued. "So you put it all together and we're confident that the Rides business will continue to be a strong top line growth company and our ability to drive margins, which you've seen in 2019, is certainly going to continue in 2020 as well."
Khosrowshahi added that one of Uber's key initiatives this year is cross-promoting its various services, including its core ridehailing business, Uber Eats, and emerging bike and scooter programs. Uber also runs a helicopter service in New York.
As of now, Uber has subscription programs for both Rides and Eats, and a loyalty program. Khosrowshahi said that Uber is aiming to "optimize" those programs this year to increase overall use per user.
"I think really 2020 is going to be the year of subscriptions at Uber," he said.
Uber shares are up 20% so far this year.