News: 0134473607

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Coronavirus Clobbers Uber, Leading To $1.8 Billion Quarterly Loss (arstechnica.com)

(Friday August 07, 2020 @11:30PM (BeauHD) from the rough-year dept.)


In the second quarter of 2020, Uber [1]announced that its ride-hailing business [2]plunged by 75 percent compared with a year earlier -- from $12.2 billion to $3 billion. "That was offset somewhat by rapid growth in Uber's delivery business," reports Ars Technica. "Delivery bookings more than doubled from $3.4 billion to $7 billion." From the report:

> The company lost $1.8 billion in the second quarter on a GAAP basis. Ignoring one-time charges, Uber has been losing around $1 billion per quarter for the last couple of years. Prior to the pandemic, Uber CEO Dara Khosrowshahi was bullish about the company's financial future. After reporting a $1.1 billion loss for the fourth quarter of 2019, Khosrowshahi said in February that he expected Uber to start generating a profit by the end of 2020.

>

> At the time, Uber's rides business was (just barely) profitable. But it was being dragged down by big losses from Uber Eats, where Uber was spending heavily in pursuit of growth. Uber expected the rides business to become more profitable over time, while losses in the delivery business would decline as growth slowed. But then the coronavirus hit, and Uber was forced to throw those projections out the window. In May, Uber laid off 3,700 people in an effort to contain mounting losses. [...] Fortunately, Uber is in no danger of running out of money; it has almost $8 billion in cash and short-term investments. It could easily burn cash at this rate for another year.



[1] https://investor.uber.com/news-events/news/press-release-details/2020/Uber-Announces-Results-for-Second-Quarter-2020/default.aspx

[2] https://arstechnica.com/cars/2020/08/coronavirus-clobbers-uber-leading-to-1-8-billion-quarterly-loss/

That's alright (Score:1)

by fustakrakich ( 1673220 )

The money doesn't really exist anyway. It's all phantom derivatives

Expenses? (Score:4, Insightful)

by Anonyrnous ( 6157814 )

Can someone please explain what Uber's expenses are? Surely they could host their apps for a couple of million a year. Where is the other $1.798 billion going? Executive bonuses?

Re: (Score:3)

by msauve ( 701917 )

Exactly.What were those 3,700 laid off employees doing? Uber is nothing but some code in the cloud. And even that, built on thumbing their nose at laws and playing outside the rules.

Re: (Score:2)

by srwood ( 99488 )

They pay the drivers more than the fares generate.

Re: (Score:2)

by JustAnotherOldGuy ( 4145623 )

> They pay the drivers more than the fares generate.

Maybe it's just me but that sounds like a bad business model.

I'm just a simple country boy and don't know about all this high finance shit, but I once heard that businesses have to do something called "turn a profit". Any Economic majors here wanna weigh in on that?

Re: (Score:2)

by _merlin ( 160982 )

They're playing a long game - they want to squeeze out all the competitors, then raise fares and reduce driver pay. It's effectively a form of dumping, which is illegal. They only need to keep fares low while faced with competition for customers, and they only need to keep driver pay acceptable while faced with competition from other employers.

Re: (Score:2)

by Barnoid ( 263111 )

> They pay the drivers more than the fares generate.

In other words, Uber should not complain about but rather be happy with the Coronavirus since fewer rides = smaller loss.

How Convenient (Score:1)

by Justin Fliss ( 4701259 )

At least now they have an excuse for losing billions. They don't care at all. They only exist to burn through peoples cash until self driving cars become a thing.

Re: (Score:2)

by azcoyote ( 1101073 )

Yeah, I think Uber has been busy "clobbering" Uber. COVID is just the latest and greatest of hurdles they have done a bad job of surmounting.

UberEats? (Score:2)

by MichaelSmith ( 789609 )

I am surprised UberEats is losing money too. I am in lockdown and working from home. I got my lunches from UberEats every day this week. I have never used them before.

Re: (Score:2)

by h33t l4x0r ( 4107715 )

Did you think your lunches would put them over the top?

Someday (Score:2)

by JustAnotherOldGuy ( 4145623 )

"Coronavirus Clobbers Uber, Leading To $1.8 Billion Quarterly Loss"

Someday I hope to be rich enough to lose $1.8 Billion.

Death Cab for Cutie (Score:2)

by bobstreo ( 1320787 )

I would get some uber eats.

I have no desire to sit in a Toyota with a stranger for hours.

No danger? (Score:2)

by ceoyoyo ( 59147 )

> Uber is in no danger of running out of money; it has almost $8 billion in cash and short-term investments. It could easily burn cash at this rate for another year.

That actually sounds like Uber is forked. They're definitely not within a year of breaking even. Even before COVID, they were blowing 4 billion plus a year, as they always have. That doesn't just suddenly turn around.

They can certainly run out of money (Score:1)

by S_Stout ( 2725099 )

"Fortunately, Uber is in no danger of running out of money; it has almost $8 billion in cash and short-term investments" This is assuming they will only lose 1.8 billion every quarter. As we head into flu season, no one is going to be taking Ubers.

$1.8 billion quarterly loss? Isn't that normal? (Score:2)

by No Longer an AC ( 4611353 )

Or does it usually take a whole year for them to lose that much?

> This made me wonder, suddenly: can telnet be written in perl?
Of course it can be written in Perl. Now if you'd said nroff,
that would be more challenging... -- Larry Wall