Uber reported Thursday it lost $5.2 billion in the second quarter, pointing to the tough reality of navigating the high-cost gig economy as a public company.
The loss was more than the $878 million it lost in the same quarter a year ago, even as it reported that revenue rose 14 percent to $3.2 billion.
Revenues are rising in part due to a cooling price war with rival Lyft, as both companies prioritize profitability over growth and spend less on incentives to attract riders to their apps. But while Uber is offering fewer discounts, its staggering loss showed it is still having trouble finding a path to profitability for its array of businesses – including ride-hailing, food delivery, scooters and freight.
Uber has set its sights on becoming a global one-stop-shop for transportation and logistics, competing not just with ride-hailing rivals but tech giants such as Amazon. The company wants to leverage its algorithms and routing knowledge to remove what it sees as inefficiencies in passenger transportation, something that can also apply to areas including food delivery and freight.
Despite its plans to build a logistics empire, its steep losses and rocky entry to being a publicly traded company point to larger concerns about Silicon Valley “unicorn” startups, which have amassed millions of customers and raked in investor cash, but have yet to prove they can turn a profit.
Uber stock prices fell 11 percent to $38.07 in after-hours trading, well below the company’s initial stock price of $45.
Uber has consistently said 2019 was expected to be an investment year. But the company also said it laid off 400 members of its global marketing team this summer, or about a third of its communications staff.
Lyft, on the other hand, reported better-than-anticipated revenue growth and other positive metrics on Wednesday, despite a $644 million loss for the quarter. That sent both Lyft and Uber stocks up in regular trading Thursday.
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