Uber earned $3.1 billion but still ended up a staggering $1.01 billion in the hole in the first quarter of this year. The company also expects those kinds of losses to continue for the rest of the year. The main culprits behind the cash drain are the expansion of Uber Eats (which requires not only paying drivers, but restaurants too) into more cities and restaurant chains, as well as increased rideshare competition from Lyft and smaller companies.
The bright spot for technologists in the earnings report was the fact that the autonomous division (ATG) is not seeing any cuts or reductions as the company continues to stake its future on self-driving cars. The company recently relaunched its autonomous test fleet after a fatal accident and is continuing to make strides into a driverless pickup service.
This is Uber’s first earnings report since going public early this year. The stock price has gone down by 12% since that initial public offering (IPO), but after-hours trading today was positive as that massive $1.01 billion loss was exactly what the company had predicted when they initially went public. Uber’s revenue of $3.1 billion was better than the expected $3.04 billion, and the potential of the Uber Eats business reassured investors and led to the stock rally after the earnings were announced. Another good sign was the fact that Uber increased its monthly active consumers by 33% from last quarter’s 93 million.
Uber bookings during the quarter totaled $14.65 billion – meaning the company took in $14.65 billion before having to pay most of that out in driver payouts, taxes, and fees (but not tips), to wind up with $3.1 billion in revenue. Clearly, having drivers to pay is a major cash drain on the company, and many investors (and Uber itself) are pinning their hopes on the autonomous division to someday slash costs for the company by removing the expense of those human drivers.
While there is still no clear path to immediate profitability, Wall Street was very relieved by these numbers and the accuracy of the financial predictions made when the company went public early this year. How long that relief lasts for a company loosing $1 billion each quarter remains to be seen.
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