Uber posts $1.8 billion quarterly loss as ridesharing business continues to suffer

Shawn Knight

Posts: 12,526   +122
Staff member
Forward-looking: Covid-19 has forced Uber to pivot a bit, putting more focus on its delivery business as people continue to stay home and order in. The firm has enough cash in the bank to hang on for at least another year but if Covid-19 lingers for much longer, some serious decisions could be in Uber's future.

Uber’s losses persist as the ongoing Covid-19 pandemic continues to ravage the company’s ridesharing division.

In its recently released second quarter earnings report, Uber said it generated $2.2 billion in revenue for the three-month period ending June 30, 2020, a 29 percent decline year-over-year. Digging deeper, we see that mobility revenue was down 67 percent compared to the same period a year ago. Fortunately, revenue from its delivery division grew 103 percent year-over-year.

All said and done, Uber posted a net loss on the quarter of $1.8 billion.

It’s a significant loss no matter how you slice it but Uber isn’t in danger of disappearing just yet. Back in March, CEO Dara Khosrowshahi told investors that the company was in a good position to ride out the pandemic as it had $10 billion in unrestricted cash on hand at the end of February. That war chest has since shrunk to $7.8 billion.

At the current burn rate, Uber could hold on for at least another year if nothing else changed. In reality, however, there are plenty of variables at play including Uber’s recent purchase of Postmates for $2.65 billion and the continued uncertainty that Covid-19 will bring as we exit summer.

Image credit: Sundry Photography, Postmodern Studio

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VitalyT

Posts: 5,049   +3,996
TechSpot Elite
Before the Covid crisis, the number of cab drivers in the city of Dublin (Ireland) has reached absurd numbers. It was like every second car in the city centre was a cab. The cab licensing body is supposed to regulate the number of active cab licenses, but all evidence points at them not doing a good job at that. So in my view, anything that can shrink that number and take a good bunch of them out of business is a very good thing to happen to the city.

I believe many people in other capitals can relate to that.
 

rrwards

Posts: 154   +247
So in my view, anything that can shrink that number and take a good bunch of them out of business is a very good thing to happen to the city.
I also prefer that independent workers lose their livelihoods. Anything to make the streets easier for me ya know?
 

VitalyT

Posts: 5,049   +3,996
TechSpot Elite
I also prefer that independent workers lose their livelihoods. Anything to make the streets easier for me ya know?
Independent workers? Are you a cab driver? Those guys here spend half a day sleeping in the long taxi queues, because there are too many of them. In my book, they are the laziest bunch, polluting the city with their overwhelming presence, car noise and burned gasoline. None of them use electrical vehicles here. The city is fighting to get the centre closed to all cars, but they are far from succeeding.
 
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Karlos95

Posts: 113   +39
In Australia, our cabbies have kind of kept up with them.

Which is good, at certain times (holidays, early mornings) cab is preferred and can use an app to contact them and get time of where they are. Same with UBER. Uber will be cheaper and more convenient in times where there are more people using them (minus public holidays, NYE for example). But in times where I mentioned, Cabs are preferred as they don't hike prices to unreasonable and more easily accessed.

Example would be Uber around 8pm to go to the pub $8 the next morning around 2am same distance can turn into $40. Cabbies are a flat fee regardless of time, but a little more expensive, so would have been about $25 for same 2am trip. So it is good to have both services. Although cabbies are more expensive, they are better in times when you need them the most and don't try to extort you. In saying that, I definitely use UBER when better suited, it is competition after-all.
 

mbrowne5061

Posts: 1,601   +906
Sounds like the perfect time to start passing some real regulations on ride sharing, some that actually have some teeth. Uber nor Lyft can afford to fight it right now.