Uber announces Q2 results with 1.8 bln Dollars loss

  • Uber announces Q2 results with 1.8 bln Dollars loss

Uber announces Q2 results with 1.8 bln Dollars loss

"[O] ur delivery business alone is now as big as our rides business was when I joined the company in 2017", Uber CEO Dara Khosrowshahi said on a conference call with analysts and investors to discuss the company's second-quarter results.

Some 4.8 million USA residents have contracted the highly contagious disease this year and more than 160,000 have died.

Uber on Thursday reported a US$1.8 billion loss in the recently ended quarter as the pandemic caused its shared-ride business revenue to plunge.

Khosrowshahi indicated Uber is looking at the delivery business as a long-term bet.

In an acknowledgment of the long-term consequences of the pandemic, Uber said this week that its own employees could work from home until the end of June 2021. On Thursday, the company reaffirmed its hope to reach that milestone next year. The delivery business also eclipsed rides in revenue, at $1.21 billion versus $790 million. The company lost a sizable $1.8 billion in the second quarter. "Uber had to lay off around 1,000 workers a year ago amid restructuring efforts", Andrew J. Hawkins writes for The Verge.

The mixed results sent Uber's share price down more than 4% in after-hours trading.

For the first time, food-delivery revenue topped ride-hailing revenue and all other segments, as the company leaned heavily on its Uber Eats business to make up for the coronavirus-related downturn. The results were broadly in line with Wall Street's already muted expectations. It achieved $3.05bn in gross ride bookings and $6.96bn in gross Uber Eats bookings. Delivery segment adjusted-EBITDA was negative at $232 million, an improvement of $54 million year-over-year. Its delivery business grew 113 per cent on a constant currency basis, but did not turn a profit, instead losing about USD232 million during the quarter.

Uber has doubled down on food delivery in recent months.

It also announced a deal in July to buy USA restaurant delivery start-up Postmates for $2.65bn - a move that could give it control of an estimated 30% of the American market.

While it became entirely clear that COVID 19 is not a good time for the mobility sector (as if it wasn't clear enough already), Uber saw a massive uptake in its food delivery business. Uber is also fighting a ruling in the United Kingdom, which has asked the company to classify its drivers as formal workers. California's Labor Commissioner Lilia Garcia-Brower filed complaints against Uber and Lyft Wednesday saying the companies committed wage theft by misclassifying employees as independent contractors.

Uber and Lyft have said their drivers are properly classified under the law.

"COVID-19 response initiatives had an impact on GAAP net loss of $48 million, including an impact on GAAP revenue of $6 million, and an impact on GAAP cost of revenue of $22 million, and an impact on total operating expenses of $20 million", the report reads.

"As some people stay closer to home, more people are ordering from Uber Eats than ever before", he said in a statement.