Uber reported a $5.2 billion loss for the second quarter
nycshooter/iStock(NEW YORK) — Uber posted its largest-ever quarterly loss — $5.2 billion — this week, as it faces increasing competition and investor scrutiny as a publicly-traded company.
The bulk of the loss — $3.9 billion — came from employees cashing in after the company’s IPO in May, $300 million in driver appreciation awards band investment spending, the company said.
The company also reported slowing growth, as overall revenue rose 14% to $3.2 billion, the smallest quarterly increase on record.
“While you often have to make trade-offs in life, we believe that we can continue to invest aggressively in growth while driving efficiencies from scale by building great tech to improve effectiveness and from good old-fashioned focus on the bottom line,” Uber CEO Dara Khosrowshahi said in an earnings call on Thursday.
Khosrowshahi said he expects investment spending to peak this year, and start declining in 2020.
Khosrowshahi said the company would refocus on its technology and the efficiency of its ride shares, which have already resulted in more profitable UberX rides.
“We’ll continue to innovate in the shared-ride space with exciting new products such as nonstop shared rides, much more sophisticated pricing algorithms and some pretty interesting innovations coming up in the second half of the year,” Khosrowshahi said.
Meanwhile, the company also reported aggressive growth plans to launch new services and features, including Uber Rewards, in addition to its other loyalty programs: Uber Cash, an Uber-branded credit card, and subscription packages for rides and Uber Eats. It is also globally rolling out its new premium economy ride-share feature, Uber Comfort.
Still the losses renewed investor concerns about the company’s ability to become profitable, since rival Lyft posted better-than-expected earnings a day before Uber’s report.
“This was not the quarter the bulls wanted to see especially after Lyft’s strong results,” Wedbush Securities analyst Dan Ives told ABC News.
Lyft, which also went public earlier this year, posted better-than-expected earnings for the second quarter.
The company reported a 72% increase in revenue over the second quarter in 2018, taking in $867.3 million. More importantly the company updated its outlook for the year, saying it expected to expected to lose $850 million to $875 million in 2019, a much-improved outlook compared to its prior estimate of $1.15 billion to $1.175 billion.
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