Uber warns of higher prices and longer wait times following Toronto’s decision to freeze new licences
Uber Technologies Inc. now faces stiff competition at key markets in North America, including Toronto and New York, that previously were considered its most successful markets.
Uber, the world’s most valuable private company, will lose a significant number of its existing seats in Canada, and in markets including Chicago, Houston, Miami, San Francisco and Washington, according to a filing with the S&P Capital IQ stock index on Tuesday.
Uber did not detail the impact of Toronto’s decision to freeze new licences, but it did report lower revenues. The ride-hailing app has grown faster in Canada than in the United States, posting 20% year-over-year growth in revenue and profits for the first time in the country.
The company was already facing competition in North America after major U.S. markets, including New York and Los Angeles, started enforcing stricter regulations.
Uber’s $35-billion valuation is now in jeopardy. “While Uber faces some challenges, others are poised to grow and become more successful,” said David Eder, an equity specialist at Pacific Life.
“The U.S. market has been a source of significant growth for Uber, but Canadian regulatory changes have exposed these new growth drivers to competition.”
The company said it will likely face a host of challenges, including the removal of the city of Toronto from Uber’s growth plans to compete in the so-called New York City market, as well as restrictions on the company’s self-driving car technology.
“This has put us on somewhat of an uncertain road ahead, but that’s where we want to be,” Uber’s chief executive, Dara Khosrowshahi, told Reuters.
Uber has grown rapidly in Canada but faces stiff competition in markets like New York and London.
“Uber’s Canadian market, where the company is still the dominant