IPO Expenses Drive Up Uber Losses To $5.2 Billion As Growth Slows
Uber’s losses ballooned to $5.24 billion in the second quarter due to $3.9 billion in stock costs associated with its IPO. Revenue growth was also Uber’s slowest ever, up just 14% from the year-ago quarter to reach $3.1 billion. Despite expecting the news given the routine expenses
The combination of massive losses and slowing revenue growth once again ignites questions over Uber’s business model and whether it’s sustainable in the long-term. The company, which has never been profitable, has already started cost-cutting measures in an effort to stem losses. In July, the company laid off 400 employees from its marketing teams globally.
During a call with analysts and reporters, Uber CEO Dara Khosrowshahi tried to assuage investors that Uber was on the right path, teasing new products coming in its shared rides and touting a stabilized U.S. market. “We’re very confident that this company, at maturity, can be cash-flow positive,” he said.
Uber did grow both its monthly riders and its global bookings by nearly a third. Its global bookings reached nearly $15.8 billion, up 31% year-over-year. Its monthly active riders hit 99 million, up 30%. It also grew its take-rate for its food delivery service, Uber Eats, despite a competitive environment that saw DoorDash raise another $600 million in May.
Unlike Uber, its U.S.-rival Lyft actually expects to lose less money in 2019 than it previously suggested. In Lyft’s second quarter earnings, announced Wednesday, the company reported better-than-expected revenues and also dialed back its loss estimates for the year.