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Uber's losses shrink as CEO promises profitability for 2021

Fox Business Staff

Uber parked its third earnings release as a public company Monday, knocking its net loss down from $5.2 billion last quarter to $1.2 billion.

The ride-sharing/food delivery/shipping company did see revenue growth rise to 30 percent compared to 14 percent a year ago. And consumers were very busy using the Uber app with gross bookings soaring some by $3.7 billion to $16.5 billion.

While several Wall Street analysts were anticipating active monthly users of around 105 million, Uber reported that number came in at 103, but good enough for a 26 percent increase in this area.

Uber raised guidance for its full-year 2019, saying it expects adjusted net revenue to accelerate in the fourth quarter. The company upped its guidance by $250 million, saying it now expects an adjusted EBITDA loss of $2.8 billion to $2.9 billion for the year.

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Last month, executives at rival service Lyft,  said they anticipate profitability by the fourth quarter of 2021. Uber CEO Dara Khosrowshahi said Monday he expects Uber to be profitable for the full year of 2021.

Uber and Lyft are both facing a big challenge in California. In September, the nation's most populous state, passed a law requiring ride-hailing drivers to be classified as employees, which could entitle them to minimum wage, benefits and workers' compensation. This could translate to higher costs for both services. Uber and Lyft proposed a ballot initiative aiming to exempt them from the new law.

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Shares of Uber, which have been under pressure since the company's IPO in May, were down by as much as 6 percent in after-hours trading following the earnings release. For the past three months, the stock is down more than 20 percent.

Uber shares could face more pressure later this week when a possible flood of Uber stock is expected to hit the open market when a lockup period expires. A lockup period expiration is when insiders -- such as employees and pre-IPO investors -- can sell their shares after holding on to them for a pre-determined length of time.

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