Advertisement

SKIP ADVERTISEMENT

Uber Posts $1.2 Billion Loss as Growth Improves

The ride-hailing company’s third-quarter loss was not as wide as the record $5.2 billion in the second quarter.

Uber on Monday reported a 30 percent increase in quarterly revenue and a net loss of $1.2 billion, down from $5.2 billion in the previous quarter.Credit...Jeenah Moon for The New York Times

SAN FRANCISCO — Uber has reported record losses and slowing growth over the past few months. Its stock has tanked. Investors have called it a “horror show.”

On Monday, the ride-hailing company responded with financial results that exceeded what Wall Street had anticipated. While Uber is still losing large amounts of money, it did not bleed as much cash as it did in the previous quarter, and its revenue growth rate improved.

Uber said third-quarter revenue had risen 30 percent from a year earlier, to $3.8 billion, above Wall Street estimates of $3.6 billion. It posted a net loss of $1.2 billion, wider than the $986 million loss a year earlier but less than the $5.2 billion loss in the previous quarter.

Yet Uber’s stock fell more than 5 percent in after-hours trading because the number of new customers coming to the app and overall bookings — which are rides and food deliveries before the company pays commissions — were weaker than some Wall Street analysts had expected.

“Our results this quarter decisively demonstrate the growing profitability of our Rides segment,” Dara Khosrowshahi, Uber’s chief executive, said in a statement. In a conference call with reporters on Monday, he added that Uber would reach profitability — if it excluded various costs — in 2021.

Uber continues to face significant challenges as investors become more skeptical of money-burning technology companies. WeWork, the office leasing company, recently scuttled its initial public offering after investors questioned the economics of its business.

Last week, Lyft, Uber’s ride-hailing rival in North America, also emphasized profits. The company said that if it excluded different sorts of costs, it would be profitable in late 2021.

Since Uber went public in May, Mr. Khosrowshahi has embarked on a belt-tightening campaign, laying off more than 1,000 workers and cutting other costs. Uber has also introduced services for temporary hiring and financial products for drivers and has acquired a majority stake in a grocery delivery start-up, Cornershop.

“We are going to be driving discipline across the company,” Mr. Khosrowshahi said on Monday.

Dan Ives, a managing director of equity research at Wedbush Securities, said investors were insisting that Uber demonstrate “a clearer path to profitability, strategic initiatives to gain share in the U.S. and give investors confidence that Dara is the pilot on the plane to steer through a myriad of challenges ahead.”

Uber said it had 103 million consumers a month in the third quarter, up 26 percent from a year earlier. It provided 1.7 billion rides and food deliveries, up 31 percent from the same period. Growth was affected by the heavy discounts that Uber continues to provide for shared rides, Mr. Khosrowshahi said.

The company provided more details on each of its businesses on Monday, breaking out its revenues from rides, food delivery, bike and scooter rentals, freight shipment and autonomous vehicles for the first time.

Previously, Uber reported the figures from rides and food delivery as a lump sum. The change is “a step in the right direction from a transparency perspective,” Mr. Ives said.

Investor skepticism about unprofitable companies could work in Uber’s favor, Mr. Khosrowshahi argued, especially as its food delivery competitors, many of which are still private companies, continue to burn cash by subsidizing deliveries.

“Many of the start-ups in the food delivery category have been trying to use cheap capital to buy their way to growth, but we have seen that capital is getting more expensive and can run dry,” Mr. Khosrowshahi said during an earnings call. “Platform leadership is both far cheaper and more permanent.”

Nelson Chai, Uber’s chief financial officer, said the company was willing to leave markets where food delivery competition had grown unsustainable. In September, Uber pulled out of delivering food in South Korea.

The pressure on Uber’s stock is not likely to end soon. On Wednesday, the so-called lockup period on insider sales of its shares will expire. That means Uber’s employees and early investors will be able to sell their company stock. If many employees and insiders rush to sell at once, that could cause Uber’s share price to decline further.

Mr. Chai said Uber was having an “active dialogue” with its shareholders about how to weather the lockup expiration.

“Obviously there is a lot of supply that’s going to hit the marketplace, and we don’t know what’s really going to happen,” he said.

Kate Conger is a technology reporter in San Francisco, covering privacy, policy and labor. Previously, she wrote about cybersecurity for Gizmodo and TechCrunch. More about Kate Conger

A version of this article appears in print on  , Section B, Page 6 of the New York edition with the headline: Uber Reports Lower Losses And Growth In Revenue. Order Reprints | Today’s Paper | Subscribe

Advertisement

SKIP ADVERTISEMENT