Uber Posts $5.2 Billion Loss and Slowest Ever Growth Rate

[brooklynite]

Source: New York Times

SAN FRANCISCO — Uber set two dubious quarterly records on Thursday as it reported its results: its largest-ever loss, exceeding $5 billion, and its slowest-ever revenue growth.

The double whammy immediately renewed questions about the prospects for the company, the world’s biggest ride-hailing business. Uber has been dogged by concerns about sluggish sales and whether it can make money, which were compounded by a disappointing initial public offering in May.

For the second quarter, Uber said it lost $5.2 billion, the largest loss since it began disclosing limited financial data in 2017. A majority of that — about $3.9 billion — was caused by stock-based compensation that Uber paid its employees after its I.P.O. Excluding that one-time expense, Uber lost $1.3 billion, or nearly twice the $878 million that it lost a year earlier.

Revenue grew to $3.1 billion, up 14 percent from a year ago, the slowest quarterly growth rate the company has ever disclosed.

Read more: https://www.nytimes.com/2019/08/08/technology/uber-earnings.html

[NewJeffCT]

1. That loss is Trumpian

it's so big

[Igel]

4. Think of it as income redistribution.

Pensions and the wealthy (and some not-so-wealthy) invest. Some investments pay off, some don't. Those that don't pay off take money from those who turn out to be fools and pay it out to workers and others.

[moniss]

2. The top management

gets the big pay until it all collapses. Then they drive away in their fabulous cars to their fabulous homes and figure out how to do it all over again. The modern way of business.

[MarcA]

3. True. Can't have decent wages and benefits or proper staffing

because CEO needs a new yacht or country club membership.

[bucolic_frolic]

5. I don't know why

they think people are eager to relinquish their cars. I know Uber is convenient, but still ... keys, ignition, pride, power, speed. But then I feel the same way about grocery shopping. Nothing like pawing the vegetables. Home delivery isn't my thing.

[mwooldri]

6. Uber has been cutting driver pay...

... one cannot make a good living driving Uber and/or Lyft. If one wants to make good money driving, go get a CDL and drive a truck. Oh, and Uber's finger is in that pie too, driving down spot freight rates.

[ToxMarz]

7. Their gambit lies entirely in self driving cars

Which ain't happening as soon as they thought they could force the immature (and still not safe enough) technology onto our roads. The business model NEVER considered being profitable with human drivers.

The problem is that it's harder to make a self driving car than a taxi app. Uber will never itself be able to make one, and the companies that can eventually get them on the road don't need Ubers app, they can make their own app, or partner with others that ad value to the model rather than just being there to collect their profit.

[Opel_Justwax]

8. It is not the CEO's money so they don't care

When Uber fails all the execs will get a big final check.

[Midnight Writer]

9. Uber has never made a profit, but it has crippled the (relatively) well paid taxi industry.

Their business model is to take losses but undercut the competition. Once Uber has a monopoly, fees will jump.

[SWBTATTReg]

10. I don't see how they can price and justify this much of a write off. I hope that the IRS closely...

reviews their write offs and decide whether to allow or not. This is very dubious ($3.9 billion alone in stock based comp)...since company is mostly relying on its driver's cars, what assets would such a company have? The only accounting system that they would have is to decide how to distribute the earnings from all of the drivers to the owners ... I am being sarcastic here, but this is income being made on the backs of drivers doing all of the work...