Investors of Uber and Lyft Are Now Worried Because Of Companies Unprofitable Business Model

Investors of Uber and Lyft Are Now Worried Because Of Companies Unprofitable Business Model

Profit is one of the most basic objectives of any company, but it seems like the ride-sharing companies Uber and Lyft are not here to make a profit. A few days ago, both companies executive said that these companies might not be able to create a single amount of profit in their lifetime. At first, then investors didn’t react that much to it since both of these companies have recently gone public, but it seems like now they are worried. Investors of Uber and Lyf are reportedly concerned about the company’s unprofitable business model, which gives a guarantee that they are not able to generate any amount of profit.

Uber’s share prices have gone down by 7% since its IPO, on the other hand, Lyft’s stock went down by 25% which shows that there’s a situation of panic among both companies investors. Uber has reportedly lost $1 billion in its first quarter of this year, and Lyft, which is a relatively small company has booked more than $1.1 billion of losses. From the last few days, it’s been observed that many investors are searching about the company’s stock performance and future.

Since the executives of the company said that they are expecting these companies will never be going to make a profit in the future, it now has put investors into a panic. Currently, the issues of drivers payment and prices hikes are creating a massive amount of problems for both companies. Recently drivers for Uber and Lyft went on a strike which has negatively impacted on company’s goodwill since a majority of them have said they are not getting a proper working environment and wage payments. Now some experts think Uber has a good chance of earning profit as compared to Lyft since the first company has a more diversified business like Uber eats. However, even after that, many investors are still in a dilemma about the company’s future growth and earning potential.

About the Author

Steven Burnett
Being one of the leading news writers of the dailyheraldbusiness, Steven holds a specialization in the domains of business and technology. The passion he has for the new developments in the connected devices, cloud technology, virtual reality, and nanotechnology is seen through the latest industry coverage which is done by him. His take on the consequences of digital technologies across the world gives his writing a modern and fresh outlook.