Is Uber a Good Investment?

PHOTO CREDIT: Uber

OVERVIEW

Uber Technologies Incorporation is a company based in the United States. The company operates ride-hailing, food delivery, and freight platforms. The company allows users to book these services which the company’s gig-workers then fulfill through the Uber app. The company was founded in 2009.

Why You Should?

  1. Uber is a great growth play in an investor’s portfolio. The company has been investing heavily in its platform to improve its services. In addition to this, the company’s business model is poised for long-term growth as it is easy to use and popular with younger consumers, who prefer the company’s services over those of other companies.
  2. Uber offers a wide range of services and is starting to enter new markets as well. From ride-hailing to food delivery and freight transportation, the company has a wide range of services for its users. This will help the company remain stable during times of low demand for one of its services. This will also help the company grow and retain customers for longer.
  3. Uber has been investing heavily in the future of its business. For example, the company has been investing in self-driving cars to improve its ride-hailing network. The company is also expanding its presence in the food delivery industry (Uber Eats) and the freight industry (Uber Freight). These future investments will benefit the company and long-term investors.
  4. Uber has also been making critical acquisitions to further expand its business. For example, the company recently acquired a grocery delivery company, Cornerstone. This will help the company enter the growing grocery delivery industry. Making acquisitions will help the company grow in the future and will also benefit investors.

Why You Should Not?

  1. The company faces tough competition in the ride-hailing and food delivery industry. Some of these competitors include Lyft, DoorDash, GrubHub, and many others. This competition might hurt the company and its investors in the future.
  2. Uber, like other businesses with a similar business model, is not very profitable and actually continues to turn over massive billion-dollar losses year over year. In my opinion, it will take the company time to turn a profit (if it ever happens in the first place). A loss-making business has hurt the company and its investors over the past couple of years.
  3. Uber also faces regulatory concerns around the world. The United States and European Union want to crack down on Uber and other companies on how much they pay their gig workers. If any regulation passes which makes gig workers employees at companies like Uber, the company will face massive losses and might stop operating in areas with this regulation.

MY OPINION

I think that I would hold off investing in Uber because of tough competition, a loss-making business model, as well as regulatory concerns. However, the company is a great growth play, offers a wide range of services, invests heavily for the future, and makes critical acquisitions to further grow its business.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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