- Uber has lost $5.2 billion in the second quarter, the biggest loss since its IPO.
- Revenue grew to $3.1 billion, up 14 percent from a year ago, the slowest quarterly growth rate Uber has ever disclosed.
Uber recently reported two bad records on Thursday after they posted their results, the biggest loss ever exceeding $5 billion and the slowest ever revenue growth.
This double blow immediately renewed questions about the prospects for the company which is the World’s largest ride-hailing business. Uber has been concerned by the sluggish sales and whether it can make money.
Uber has lost $5.2 billion in the second quarter, the biggest loss since its IPO. Majority of the loss accounted to the compensation to the employees that Uber paid after it I.P.O. around $3.9 billion.
Expect this one time expense Uber has lost $1.3 billion which is twice the amount $878 million that it lost last year. On that same basis and excluding other costs, the company said it expected to lose $3 billion to $3.2 billion this year.
“We think that 2019 will be our peak investment year,” Dara Khosrowshahi, Uber’s chief executive, said in an interview, noting that he anticipated losses would decline over the next two years. “We want to make sure that the kind of growth we have is healthy growth.
Revenue grew to $3.1 billion, up 14 percent from a year ago, the slowest quarterly growth rate Uber has ever disclosed.
The results continued to cast a shadow over Uber, sending its stock falling in after-hours trading. The company whose growth boosted like a rocket as it brought a revolution in traditional transportation and entered the market around the world and was expected to be valued at about $120 billion at its I.P.O.
But the company dropped below its $45 offering price on its first day of trading and has only briefly risen above that share price since. The chief executive was criticized for the way Uber went public and has faced a lot of questions about how he plans to revoke the growth and pace up the business.
“What we’re looking for is evidence that the company can reaccelerate revenue growth after the last few quarters,” said Tom White, a senior vice president at the financial firm D.A. Davidson.
The ride-hailing industry has faced scrutiny in recent months for the way its businesses burn money with no imminent likelihood of profits. Companies must constantly spend freely for incentives to attract passengers and drivers and to fend off competition. Both Uber and its rival Lyft were questioned by investors this year about their business models as they prepared to list on the stock market.
Although it has relaxed its discounts for rides, the food delivery business is still highly competitive and the company plans to invest more aggressively in that area, he said. Uber’s food delivery business, Uber Eats, more than doubled its number of monthly customers in the quarter.
With its operations also running in India, Uber is facing a huge competition from Ola, a homegrown Ride-hailing app which is a giant now. Ola vs Uber in the Indian transportation market is the same as Flipkart vs Amazon in the Indian e-commerce market.