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Uber reports loss of $ 5.2 billion after going public



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Uber reported on Thursday it lost $ 5.2 billion in the second quarter, pointing to the harsh reality of navigating the high cost concerts economy as a public company.

Quarterly results, Uber's biggest loss, were hampered by a one-time compensation of $ 3.9 billion stemming from the company's stock exchange listing, as well as a reward for the driver's appreciation of a total of nearly $ 300 million.

Adding that toll, Uber said it also faced increasing competition in world markets and slowing growth on its core platform, where revenue increased by 2 percent. Total revenues increased by 14 percent to $ 3.2 billion.



Uber CEO Dara Khosrowshahi stated a strategy to combat these trends in the company's earnings call, largely dependent on improving the company's algorithms. Uber is working to improve the ability to match riders to drivers and each other, as well as to increase the number of seats filled in each turn, which will improve profitability. And Uber is working to create better partnerships with local transit agencies in its effort to entice more passengers to take shared trips instead of driving alone.


"We are focused on improving the profitability of this market and many other markets around the world and based on what we read Lyft seems to be focused in a similar way," Khosrowshahi said of the conversation.

Revenue is partially up due to a cooling price war with competing Lyft, as both companies prioritize profitability over growth and spend less on incentives to attract riders to their apps. But while Uber offers fewer discounts, the staggering loss showed that it has trouble finding a way to profitability for its range of businesses – including horse riding, food delivery, scooters and freight transportation.

Uber has set its sights on becoming a global one-stop shop for transportation and logistics, competing not only with competing rivals, but with tech giants like Amazon. The company wants to utilize algorithms and routing knowledge to remove what it sees as inefficiency in passenger transport, which may also apply to areas including food delivery and freight transport.

Despite the plans to build a logistics empire, its steep losses and Rocky's entry into a listed company points to greater concerns for Silicon Valley "unicorn" start-ups, which have gathered millions of customers and raised investor cash, but who have not yet proven that they can make a profit.


Uber stock prices fell 11 percent, to $ 38.07, in afternoon trading, well below the company's original $ 45 share price. The stock had recovered somewhat after revenue, to just over $ 40.

Uber has consistently said that 2019 expected to be an investment year. But the company also said it laid off 400 members of the global market team this summer – about a third of the communications staff. Uber also faced stiff competition in Latin America, where its reported revenue fell by nearly a quarter compared to the same period a year ago.

However, Lyft reported revenue growth better than expected and other positive metrics despite a $ 644 million loss for the quarter. It sent Lyft and Uber shares up in ordinary trading on Thursday before Uber's earnings release.

Uber's main competitor, Khosrowshahi said, was not Lyft, but rather car ownership. When Uber was stacked against this calculation, "he is doing very well," he added.

The company's popular food delivery service Uber Eats reported significant revenue growth, up 72 percent from the same quarter last year when it raised $ 595 million in revenue.

"Although we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we have made good progress in that direction," Uber CFO Nelson Chai said in a statement that followed with earnings.


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