Uber Technologies Inc. said on Wednesday it narrowed its quarterly losses from a year earlier, although the ride-hailing company is still a long way from proving it can be profitable as it gears up to go public in 2019.
Heather Somerville of Reuters had the news:
Under the leadership of Dara Khosrowshahi, who became chief executive in September, Uber has juggled investing in new markets while retreating from others where it was losing millions of dollars. It is building up services like food delivery and freight hauling as it seeks new revenue, and possibly a path to profitability, outside its core business.
Uber’s net loss narrowed to $891 million in its second quarter ending June 30 from $1.1 billion a year earlier. Its adjusted loss before interest, taxes, depreciation and amortization was $614 million, down from $773 million a year earlier.
Net revenue rose more quickly than gross bookings in the second quarter from the prior period as the company dialed back on promotional subsidies of rides.
But its growth faces risks from decisions like that by New York City this month to cap licenses for ride-hailing services for one year. Uber has also had to grapple with corporate scandals and has lingering and costly legal battles, including over its classification of drivers as independent contractors, and federal probes to resolve.
Max A. Cherney of MarketWatch.com reported that Uber’s efforts to increase revenue have paid off:
According to the company, the recent quarter’s results demonstrate that it has made good on its promise and has increased its investments in Uber Eats, the food-delivery program which it says is growing at a 200% pace year-over-year. As a part of the expansion, the company is launching in five to 10 cities a week, which carries costs related to marketing, hiring staff as well as working out relationships with restaurants.
Expanding its ride-hailing platform in India and the Middle East is costly too. The company said it incurs costs from activities such as bringing on staff to handle the expansion, as well as drivers and promotions.
After four straight quarters of declining promotion costs, the second quarter saw that number rise to $142 million, up $132 million in the first quarter.
Uber is also making a significant bet on its bike-sharing unit, and the second-quarter’s bottom line reflects items such as marketing and capital expenditures needed to launch in new markets. Earlier this year, Uber announced its acquisition of Jump Bikes, a dockless bike-share service from parent company Social Bicycles Inc. It also invested in the scooter company Lime.
Paayal Zavera of CNBC.com reported that the growth of bookings slowed:
Uber told CNBC its Q2 net revenue was $2.7 billion, up 51 percent from the same quarter last year, and gross bookings were $12 billion, up 41 percent year-over-year.
That’s a slight slowdown in growth from Q1, when it booked revenue of $2.5 billion, up 67 percent year-over-year, and gross bookings of $11.3 billion, up 55 percent year-over-year.
Uber’s adjusted EBITDA loss for the second quarter was $404 million. That’s down 24 percent year-over-year, but an increase of 32 percent since the first quarter. Adjusted net loss widened in the second quarter to $659 million, up from $577 million in Q1.
Uber’s gross cash on hand at the end of the June quarter was $7.3 billion, increasing by $1 billion from a quarter before.
Because Uber is privately held, these numbers are not reported publicly in a government filing, but are the numbers that Uber gives its own investors on a regular basis.
