Why does Uber promise sooner profitability?
Uber, the company with many stories behind it, surprised Wall Street with slightly better results on 02/07/2020 claiming that by the end of this year the business will be profitable sooner than expected.
Nothing like financial results make stakeholders confident. It is true that "numbers don't tell lie" as long as we don't manipulate them!
If things go well as described, then there are great points to learn from Uber.
1. Insisting on strengths
Uber Eats is the shining point by 71% growth in revenue. It's the most promising revenue channel even though it has its high expenses too and it should compete with others such as Postmates or Doordash which have lighter business models and are only focused on this major with less pressure on profitability.
2. Learning from its own mistakes
Finally, the CEO, Dara Khosrowshahi, said: "We recognize that the era of growth at all costs is over".
It's smart to know what investors don't want to see only growth but profitable growth. Khosrowshahi summarizes the success in three strategies:
A) Continuous innovation
B) Excellent execution
C) Unrivaled scale of global platform
3. Know your strengths
To limit your loss, sometimes you should sell a part of your strength or stop it where it's not your competitive advantage.
"Uber sold its India Eats business to local competitor Zomato for a nearly 10% stake in the business worth $250 million. It also stopped delivering in South Korea." as Business Insider reported.
4. Aligning organizational structure and strategies
Our structure, positions, roles, and responsibilities are all the tools that can support us to reach our goals providing that they are aligned with our strategies.
The CEO restructured the organization many times to get the best out of people and the professional relationship among different departments. In many steps that had to say bye to their employees too.
5. Business diversification
Uber didn't stop by providing ride services or food delivery only. They have "Flexible Shipping" services for truck drivers as a great solution to save their time and also to keep their trucks on the road to make the best profit out of them.
6. Considering future needs
Uber joined Hyundai to provide a concept for future urban mobility. They came up with an Air Taxi model which can solve many mobility problems in the future.
It seems that Uber is on the right track by above main 6 strategies. These solutions worked for Uber, will they work for your business too? Not necessarily. Always tailor-made solutions are the best ones in business!