Uber Loss Touches $5.2 Bn, Even As Revenue Remains Stagnant

Ride-hailing major Uber has reported a loss of $5.2 Bn in the second quarter of 2019, as compared to $3.7 Bn in the Q1 of 2019. The company attributed this loss to $298 Mn spent on driver appreciation award offered in connection with the company’s initial public offering, along with its $3.9 Bn spendings towards stock-based compensation expenses. 

Further, the company’s net revenue was recorded to be $2.8 Bn in this quarter, as compared to $2.7 Bn in the last quarter. 

Speaking at the company’s earnings call, CEO Dara Khosrowshahi said, “Our platform strategy continues to deliver strong results, with trips up 35% and gross bookings up 37% in constant currency, compared to the second quarter of last year. In July, the Uber platform reached over 100 Mn monthly active platform consumers for the first time,” he added

Uber’s food delivery business Uber Eats reported a growth of 140% year-on-year. Over 40% of new Uber Eats customers are said to have never used Uber before. The food delivery platform claims to have partnered with 320K restaurants by the end of Q2 2019. Addition of service and small-basket fees on Uber Eats deliveries are said to have improved the net revenue rate of the company as compared to the last quarter. 

SoftBank portfolio Uber got listed on the New York Stock Exchange on May 10 at the opening price of $45 per share. 

At the time of submitting its IPO filing, Uber has highlighted the risk of it never making profits, the company had then said, “The personal mobility, meal delivery, and logistics industries are highly competitive, with well-established and low-cost alternatives that have been available for decades, low barriers to entry, low switching costs, and well-capitalized competitors in nearly every major geographic region. If we are unable to compete effectively in these industries, our business and financial prospects would be adversely impacted.”

Uber In India

Uber has been making significant investments in incentives and promotions to help drive growth in India, where local competitors, particularly Ola which has the funding and the home turf advantage. In December 2018, data from an internal company email showed that India accounts for 11% of the total trips received by the platform from across the world.

San-Francisco-based cab aggregator’s India unit posted a 30% jump in FY18 revenue. Uber India Systems posted revenues of $74.8 Mn (INR 533 Cr) for the year ended March 2018 versus $57.5 Mn (INR 410 Cr) in the previous year.

Earlier this month, the company was reported to be working on piloting a bus service in India with an eye on the country’s mass transportation system. The product is already live in parts of Latin America and the Middle East, which may inform its plans for India.

The US-based company is taking this step as a part of its plan to make India the base for building and experimenting with new products and export them to international markets such as Latin America and Africa.