Uber posts $5.2 billion loss and slowest ever growth rate

Uber set two dubious quarterly records Thursday as it reported its results: its largest-ever loss, exceeding $5 billion, and its slowest-ever revenue growth.

The double whammy immediately renewed questions about the prospects for the company, the world’s biggest ride-hailing business. Uber has been dogged by concerns about sluggish sales and whether it can make money, which were compounded by a disappointing initial public offering in May.

For the second quarter, Uber said it lost $5.2 billion, the largest loss since it began disclosing limited financial data in 2017. A majority of that — about $3.9 billion — was caused by stock-based compensation that Uber paid its employees after its IPO. Excluding that one-time expense, Uber lost $1.3 billion, or nearly twice the $878 million that it lost a year earlier.

Revenue grew to $3.1 billion, up 14% from a year ago, the slowest quarterly growth rate the company has ever disclosed.

“We think that 2019 will be our peak investment year,” Dara Khosrowshahi, Uber’s chief executive, said in an interview, noting that he expected losses to decline over the next two years. “We want to make sure that the kind of growth we have is healthy growth.”

He added that there were other positives. Uber’s bookings — the money it gets from rides and deliveries before paying commissions to drivers — rose 31% from a year ago. The company also added customers, totalling more than 100 million monthly active riders for the first time.

The results continued to cast a shadow over Uber, whose growth once rose like a rocket ship as it upended traditional transportation and barrelled into markets around the world. The company’s IPO, which was expected to value it at about $120 billion, was hurt when Uber dropped below its $45 offering price on its first day of trading and has only briefly risen above that share price since. Khosrowshahi has been criticised for the way that Uber went public and has faced questions about how he intends to revive growth.

“What we’re looking for is evidence that the company can reaccelerate revenue growth after the last few quarters,” said Tom White, a senior vice president at the financial firm D.A. Davidson.

In a bright spot, the company’s food delivery business, Uber Eats, more than doubled its number of monthly customers. Uber, which had been competing with its rival Lyft by offering heavily discounted rides to lure riders, has also seen that price war subside, which could lead to more revenue.

“The competitive environment, which got worse in the second half of last year, is progressively improving now,” Khosrowshahi said.

Although Uber has relaxed its discounts for rides, the food delivery business is still highly competitive and the company plans to invest more aggressively on that front, he said.

On Wednesday, when Lyft reported its latest financial results, it said that it would not lose as much money in 2019 as it had previously anticipated.

c.2019 New York Times News Service