Uber Loses at Least $1.2 Billion in First Half of 2016

Showa50

Well-Known Member
The ride-hailing giant Uber Technologies Inc. is not a public company, but every three months, dozens of shareholders get on a conference call to hear the latest details on its business performance from its head of finance, Gautam Gupta.

On Friday, Gupta told investors that Uber's losses mounted in the second quarter. Even in the U.S., where Uber had turned a profit during its first quarter, the company was once again losing money.

In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber's losses in the first half of 2016 totaled at least $1.27 billion.

Subsidies for Uber's drivers are responsible for the majority of the company's losses globally, Gupta told investors, according to people familiar with the matter. An Uber spokesman declined to comment.

"You won't find too many technology companies that could lose this much money, this quickly," said Aswath Damodaran, a business professor at New York University who has written skeptically of Uber's astronomical valuation on his blog. "For a private business to raise as much capital as Uber has been able to is unprecedented."

Bookings grew tremendously from the first quarter of this year to the second, from above $3.8 billion to more than $5 billion. Net revenue, under generally accepted accounting principles, grew about 18 percent, from about $960 million in the first quarter to about $1.1 billion in the second.

Uber also told investors during the call that it was changing how it calculates UberPool's contribution to revenue in the second quarter, which had the effect of artificially increasing revenue.

Uber's losses and revenue have generally grown in lockstep as the company's global ambitions have expanded. Uber has lost money quarter after quarter. In 2015, Uber lost at least $2 billion before interest, taxes, depreciation and amortization. Uber, which is seven years old, has lost at least $4 billion in the history of the company.

It's hard to find much of a precedent for Uber's losses. Webvan and Kozmo.com—two now-defunct phantoms of the original dot-com boom—lost just over $1 billion combined in their short lifetimes. Amazon.com Inc. is famous for losing money while increasing its market value, but its biggest loss ever totaled $1.4 billion in 2000. Uber exceeded that number in 2015 and is on pace to do it again this year.

"It's hardly rare for companies to lose large sums of money as they try to build significant markets and battle for market share," said Joe Grundfest, professor of law and business at Stanford. "The interesting challenge is for them to turn the corner to become profitable, cash-flow-positive entities."

The second quarter of 2016, which ended in June, could represent a nadir for Uber. The company's losses will likely fall. In July, it cut a deal with its largest global competitor, Chinese ride-hailing behemoth Didi Chuxing, washing its hands of its massive losses in that country. Didi gave Uber a 17.5 percent stake in its business and a $1 billion investment in exchange for Uber's retreat. Uber lost at least $2 billion in two years in China, people familiar with the matter told Bloomberg in July. Uber won't see any losses from China on its balance sheet after August, the company said on Friday's investor call.

Uber’s backers range from venture capital firms like Benchmark Capital to the investment bank Goldman Sachs. Altogether, Uber has raised more than $16 billion in cash and debt. Its latest valuation is a whopping $69 billion. The company has effectively redistributed at least $1 billion to the Chinese working class in the form of heavy subsidies to drivers there. "Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there," Uber Chief Executive Officer Travis Kalanick wrote in a letter announcing the company's departure from China.

Uber has been engaged in a fierce price war with Lyft Inc. this year, and that has also contributed to the enormous losses. Uber told investors on Friday's call that it's willing to spend to maintain its market share in the U.S. The company told investors that it believes Uber has between 84 percent and 87 percent of the market in the U.S., according to a person familiar with the matter. One investor said that he was expecting Uber to continue losing money in the U.S. for the next quarter or two.

Lyft, a much smaller company by trip volume, looks to be losing more money than Uber in the U.S. Lyft has told investors that it will keep its losses under $50 million a month, Bloomberg reported in April. That would be about $150 million in a quarter. Uber's U.S. losses totaled about $100 million in the second quarter of this year. In July, Uber delivered 62 million rides to Lyft's 13.9 million. Uber's subsidies were spread over more rides.

Uber has about $8 billion in the bank and will soon receive $1 billion in cash from Didi, according to a person familiar with the matter. Uber also has access to a $2 billion credit line and a $1.2 billion loan.

"I think what Uber is trying to do is, 'Hey, look, we're going to take the losses up front in order to get to disproportionate scale,'" said Robert Siegel, lecturer in management at Stanford's business school. "The question is when they can get to profitability."


http://finance.yahoo.com/news/uber-loses-least-1-2-120012631.html
 

newbie310

New Member
Ride-hailing service Uber lost at least $1.2billion in the first half of this year alone as the firm hemorrhages money in order to dominate the market, it is reported.

Gautam Gupta, Uber's head of finance, told investors last week that Uber had lost $750million in the second quarter of 2016, Bloomberg reports.

The most recent loss, coupled with a loss of at least $520million in the first quarter of the year, totals at least $1.27billion in 2016 so far.


That puts the company on track to meet or exceed the already breathtaking losses it accumulated in 2015, which totaled at least $2billion, according to Bloomberg.

Uber's quarterly losses are virtually unprecedented, Bloomberg's technology arm reported.

Amazon, which is famous for losing money to maintain market value, recorded its largest loss at $1.4billion back in 2000, Bloomberg said.

While publicly traded companies have lost far more money in terms of real value over the course of a quarter or a year, Uber is not a public company, and so does not bear comparison.

The subsidies Uber grants its drivers was the main reason for the loss, Gupta told investors in a quarterly conference call, Bloomberg said, citing sources.

The company's net revenue increased to about $1.1billion in the second quarter from $960million in the first quarter, while bookings rose to more than $5billion from more than $3.8billion in the prior quarter, Bloomberg said.

Read more: http://www.dailymail.co.uk/news/art...est-losses-company-history.html#ixzz4IMU9RX8x
Follow us: @MailOnline on Twitter | DailyMail on Facebook
 

babyrocket223

Well-Known Member
Like it says, all they want is to get rid of lyft first. Then whatever come will come. Believe that Travis is not in the same level with you haha.
 

Optimus Uber

Well-Known Member
Yep and taking $3 billion sub-prime loans isn't helping the situation. Always have stated, run by morons.

Only way out of it is to raise rates. They need to make more money. Investors going to pull out. Lyft could win. Uber's burn rate, they wont make it a year without some serious funding and a change in management. Someone that knows what they are doing.

How about turning a profit before all the expenditures on producing self-driving cars? Why take on a project that will take 5-10 years to complete and keep digging your hole deeper than getting the company on its feet? Google has had self driving cars for years, still aren't approved for the roadway.
 

LA_Rides

Well-Known Member
Not only does uBer need to raise there prices which is what they screwed up when the first came
to Los Angeles and kept on lowering sending memo's to drivers we are experimenting. My ass..

The type of service was never meant to be the Pick N. Save of transportation but uBer
decided to devalue the service. Also uBer really needs to stop throwing these exec parties and
throwing money out there like they really have it. I can just imagine how much they are getting paid.
If you can't walk the walk don't talk the talk.

It has been said numerous times uBer is a classic pump and dump on a huge scale. Worse then
Bernie Madolf..
 

Showa50

Well-Known Member
Ride-hailing service Uber lost at least $1.2billion in the first half of this year alone as the firm hemorrhages money in order to dominate the market, it is reported.

Gautam Gupta, Uber's head of finance, told investors last week that Uber had lost $750million in the second quarter of 2016, Bloomberg reports.

The most recent loss, coupled with a loss of at least $520million in the first quarter of the year, totals at least $1.27billion in 2016 so far.


That puts the company on track to meet or exceed the already breathtaking losses it accumulated in 2015, which totaled at least $2billion, according to Bloomberg.

Uber's quarterly losses are virtually unprecedented, Bloomberg's technology arm reported.

Amazon, which is famous for losing money to maintain market value, recorded its largest loss at $1.4billion back in 2000, Bloomberg said.

While publicly traded companies have lost far more money in terms of real value over the course of a quarter or a year, Uber is not a public company, and so does not bear comparison.

The subsidies Uber grants its drivers was the main reason for the loss, Gupta told investors in a quarterly conference call, Bloomberg said, citing sources.

The company's net revenue increased to about $1.1billion in the second quarter from $960million in the first quarter, while bookings rose to more than $5billion from more than $3.8billion in the prior quarter, Bloomberg said.

Read more: http://www.dailymail.co.uk/news/art...est-losses-company-history.html#ixzz4IMU9RX8x
Follow us: @MailOnline on Twitter | DailyMail on Facebook
Um yeah, I already posted this. Or didn't you read, smh
 

LASAC_BER

Well-Known Member
Um yeah, I already posted this. Or didn't you read, smh
upload_2016-8-25_11-29-2.jpeg
 

elelegido

Well-Known Member
Hey, RamzFanz, you know how a few months ago you said:
To think that all these major investors are just blindly dumping billions on Uber to subsidize rides is ridiculous.
Guess what?
Subsidies for Uber's drivers are responsible for the majority of the company's losses globally, Gupta [Uber Head of Finance] told investors
See... when a company pays its drivers more than it takes in in revenue, it's called a subsidy.

Lol :biggrin:
 
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UberIsAllFubared

Well-Known Member
I have been saying they are subsidizing for months. At the end of the day, they are going to have to raise prices, bottom line. There is no reason an uber, which at least in LA is more reliable than a taxi, should be 70% cheaper than a taxi. Its just makes absolutely no business sense. None whats so ever. If their rates were even double what they are in LA, it was still be around30-38% cheaper than a a taxi, and they wouldn't have to worry about having enough cars. The reason why they don't have enough cars is because drivers don't like working for free. Their product is suffering too. The number of my passengers who complain about previous drivers are increasing at an alarming rate. Unfortunately, this company is run by people who are arrogant and stupid, a deadly combination.
 

Tempuber

Active Member
It's a loss leader. The plan is to eviserate Lyft at any cost & 100% own the market. This should take about 3 more years & they will be extremely profitable in 5 years, with their self driving cars.
 

Tedgey

Well-Known Member
Subsidies for Uber's drivers are responsible for the majority of the company's losses globally

What a clown! So if we didn't have to pay the drivers so dam much.

These jerks have the nerve to complain that paying the drivers is their biggest expense when they have the drivers absorb all the fuel, maintenance, parking/storage, and cost of depreciation? Of course it's your biggest expense idiot.

The messed up thing is, Uber is willing to concede all those things in their accounting. What they're not willing to concede is the need for the drivers to have a little PROFIT expense.
 
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