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Uber Plans to Expand Revenue Pockets with the Launch of a New Advertising Division

Industry: Transportation, Infrastructure & Logistics
Current: Company Performance

Uber is planning to expand its revenue streams by capitalizing its existing user database
Uber’s rival Lyft also launched a media division to expand its advertising offerings
Growing competition among ride-hailing companies is forcing them to diversify and add new revenue streams

Growing Competition Among Ride-Hailing Companies Resulting in Declining Profit Margins

Growing competition has reduced the profits of ride-hailing companies. Due to intense price competition, market participants are experiencing a considerable deterioration of their balance sheets. The companies are trying to lower down their service fees and offer lower fares resulting in diminishing profit margins. Companies are looking out for ways to utilize their existing client base and increase their revenue sources.

Uber Intends to Earn $1 Billion from Advertising Revenues

Uber's stock price witnessed a steep decline this year, with the stock price falling by nearly 50%. During the pandemic, the company struggled to sustain its revenue, but thanks to regulatory easing, the revenue of the company is now in the revival stage.

To maintain market share and gain a competitive advantage, the company intends to diversify its revenue streams. Uber’s new advertisement division will utilize the company’s database of nearly 122 million active users. Advertisers and markets will be able to promote their brands within Uber's ride-hailing app, UberEATS, as well as in-vehicle digital advertisements. The company intends to earn approximately $1 billion from ad revenue by the year 2024. Furthermore, the new strategy is expected to restore investors’ confidence in the company’s stock.

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