Chennai: Uber Technologies Inc has reported a record $5.2 billion loss and a revenue that fell short due to a slowdown of its ride-hailing business. The firm’s shares dipped six per cent as a consequence.
The company said a price war in the United States was easing and that an important measure of profitability topped its target, but slowing revenue growth raised questions about Uber’s ability to expand and fend off competition, said a Reuters report.
Uber’s second-quarter net loss, widening from a loss of $878 million a year earlier, included $3.9 billion of stock-based compensation expenses related to its IPO earlier this year and nearly $300 million in ‘driver appreciation’ related to the stock sale, it said.
Uber reported that revenue growth slowed to 14 per cent to $3.2 billion and fell short of the average analyst estimate of $3.36 billion. The company’s core business, ride-hailing, grew revenue only two per cent to $2.3 billion, while food delivery Uber Eats grew 72 per cent to $595 million.
According to the report, analysts on average were expecting $15.80 billion. But gross bookings, a measure of total value of car rides, scooter and bicycle trips, food deliveries and other services before payments to drivers, restaurants and other expenses, rose 31 per cent from a year earlier to $15.76 billion.
However, Uber is keeping less money per car ride, stated the report. The amount passengers spent on trips rose 20 per cent while the amount Uber kept after paying its drivers increased just four per cent, it said.
On the other hand, Uber’s costs rose 147 per cent to $8.65 billion in the quarter. The firm had also increased its spending on research and development sharply.
Chief Executive Officer Dara Khosrowshahi said the competitive environment was starting to rationalise and had been ‘progressively improving’ since the first quarter. ‘This year would be the peak for investment and losses would lessen in 2020 and 2021,’ he said.
‘While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction,’ CFO, Nelson Chai said in a statement.
| Expectation vs reality |
| * Uber’s adjusted loss before items including interest, tax, and stock-based compensation more than doubled to $656 million. But it was better than it had expected, Uber said.* Gross bookings for the year would be $65 billion to $67 billion, it said, in line with Wall Street’s target of $65.9 billion.
* Its monthly active users have risen, touching 99 million globally. This was an increase from 93 million at the end of the first quarter and 76 million a year earlier. |