Uber, now a public company, lost over $5 billion in the last quarter

nanoguy

TS Addict
Staff member

Earlier this week Uber reported their earnings for the quarter ending in June and it numbers don't look nearly as good as they should. When you consider that the ridesharing giant has been bleeding a whopping $5.2 billion in a single quarter, you have to wonder if the days of cheap rides might soon come to an end.

The company went public in May valued at $82 billion which was impressive and yet short of upper end estimates. Their strategy already had investors concerned about sluggish sales and less than stellar revenues, but this quarter has been the most expensive one for the company since it began disclosing financial data in 2017.

On a more positive note, $3.9 billion can be chalked down to the stock-based compensation that Uber employees received after the IPO, which is why some Wall Street investors won't lose sleep over it, if you believe Bloomberg. However, that still leaves a significant $1.3 billion operating loss even as trips rose 35 percent compared to last year and revenue grew 14 percent.

Rival Lyft is in a similar position, but unlike Uber it reported higher than expected revenues of $867 million, which is 72 percent more than a year ago. Uber has UberEats to thank for improving the bottom line with new customers that were gained through the Rewards program and partnerships with companies like Starbucks.

To put things in perspective, Uber aspires to offer all forms of transportation and is investing heavily in self-driving cars, expanding its bicycle and scooter business, building a freight delivery platform, and even helicopter rides. The company also laid off a third of its global marketing staff and saw three board members step down since the IPO, presumably to move faster as an organization.

That said, Uber still has several problems on its hands, the most important of which are the drivers, who aren't full-time employees with all the added benefits that come with that business model. Regulators in New York have set a minimum wage for ride-hailing drivers, which has set a precedent that could lead to more states taking similar action in the future.

Also worth noting is that Uber's dream of ushering a new era of transportation has led to incidents where its drivers can unknowingly end up helping an armed robber escape the scene of a crime. And if that isn't enough, some countries like Australia aren't making it easy to operate on their territories.

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Theinsanegamer

TS Evangelist
It amazes me these silicon valley tech bros can manage to loose so much money on such a basic idea. How much can servers possibly cost?
 

Dimitrios

TS Guru
I thought the market would be flooded but I have a friend in CT that stopped by my house yesterday bragging about UBER. Money is actually good and he has things down to a T. He was talking about working certain days and the time frame and using some sort of special online map to filter the best paying areas or something. He made like $753 within a few days.

What's the reason why UBER'S rules about having a car 2012 or newer?
 

captaincranky

TechSpot Addict
...[ ]....What's the reason why UBER'S rules about having a car 2012 or newer?
It's been my experience that cars sort of "hit a wall" at a certain age, where a ton of OEM parts fail in rapid succession. That doesn't happen until later than the 7 years Uber is allowing, but you have to assume they've studied failure reports, and are granting themselves a liberal cushion to avoid these issues.

I did read an interesting article about how in and around New York City who wanted to drive full time, were being steered toward buying brand new Lincoln Town Cars, (mostly black), at horrific interest rates, approaching those of "Rent-a-Center". That being predicated on the wannabe driver's oftentimes dismal credit ratings..
 
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PEnnn

TS Addict
Of course it's losing money. It's been losing money from day one.

But that didn't scare Wall Street and their IPO scams they spin weekly with such companies. Wall Street and Uber owners made billions on the IPO scam, the rest doesn't matter to them. And on paper, Uber is worth billions.....while losing billions!!

You gotta love the new Ponzi economy!!
 

mctommy

TS Guru
It amazes me these silicon valley tech bros can manage to loose so much money on such a basic idea. How much can servers possibly cost?
For most players in the service industry, the highest cost is labor. For Uber, it's both the cost of its workforce and also their promotions to sustain their price war with Lyft.