Uber’s billion-dollar loss was related to investments in other startups.
Uber just reported positive cash flow of $382 million, an indicator that the ride-hailing company’s key efforts to cut costs are already starting to bear fruit, even amid an economic downturn.
Uber is still a huge money burning machine, but most of it is due to investments in other startups. The company reported revenue of $8.1 billion in the second quarter of 2022, up 105% from the same quarter a year ago. The company also reported a $2.6 billion loss — mostly due to a drop in the value of its stakes in startups including Aurora, Grab and Zomato.
After all, however, Uber beat analysts’ forecasts largely thanks to growth in its ride-hailing and food delivery businesses. Total bookings (the value of payments Uber receives from customers before paying drivers and other fees and discounts) increased 33% year-over-year to $29.1 billion. In which, the ride-hailing segment accounted for 13.4 billion USD while the food delivery segment accounted for 13.9 billion USD.
In this quarter, customers booked more Uber rides, reaching 1.87 billion trips or 21 million trips per day. This is an increase of 24% compared to the same period last year.
Still, having positive cash flow is indeed good news for Dara Khosrowshahi, the company’s CEO, who personally promised earlier this year that Uber would need to be “aggressive with costs.”
“Last quarter, I challenged my team to meet their commitment to profitability faster than planned, and they did,” Khosrowshahi said in the statement.
However, according to Dan Ives – from the company Wedbush, the results show that “the possibility of Uber becoming profitable will still be delayed in some cities”.
In fact, there’s still a lot of uncertainty surrounding Uber’s business, including legal issues with drivers.
Currently, Uber has 5 million drivers globally, which is an increase of 31% year-over-year. Earlier this year, a severe driver shortage forced Uber to spend heavily on driver subsidies, causing them to suffer a fair amount of financial loss.
Last month, the “Uber Profile” revealed by The Guardian became a hot topic of discussion. Accordingly, there is a lot of shocking information in the start-up phase of Uber revealed. Uber often subsidizes drivers heavily to attract a large enough volume of vehicles, provide instant service to customers, and reduce fares. These subsidies involve spending billions of dollars in cash by investors, and Uber has sought to cut what it pays drivers as soon as possible.
According to the Uber Profile, Uber has paid several prominent university professors in the US and Europe hundreds of thousands of dollars to publish reports that can be used as part of the company’s lobbying campaign.
Accordingly, Uber has entered into agreements with a series of leading academics, paying them to publish research on the benefits of Uber’s economic model. Worth mentioning, these reports are all released at a time when Uber is struggling with regulators in the major cities around the world that it has just entered.
Source: The Verge