Low prices made Uber into a global sensation. Now they threaten its future. Cheap fares kept the ride-hailing app on the road through its worst years, despite accusations of aggressive rule-breaking, a belligerent founder and friction with drivers. But as the financial credibility of its disruptive business model is wearing thin, the era of Silicon Valley-backed growth at all costs is at an end.
Uber is a company valued at $91bn that still loses money. For more than a decade, investors have accepted billions of dollars of loss. Not for much longer. Uber is pledging to balance the books. Since the start of the pandemic it has shed its experimental driverless car and vertical lift-off aircraft units, offloaded bikes and scooters and reduced headcount by around 25 per cent.
Prices for customers are rising too. Uber, a company born in the midst of the financial crisis, is trying to deliver profits just as the labour market is in flux. To the dismay of users, ultra cheap services are growing more costly.