Despite earning $2.8 billion in revenue, Uber bleeds $891 million in net losses
How can a company that rakes in USD $2.8 billion still manage to hit a massive net loss of almost $900 million? Ask the guys in charge of Uber. The popular ride-sharing company posted a second-quarter loss of $891 million earlier today, hinting at some intense spending in new and speculative ventures.
The company reported that second-quarter sales rose 63% year-over-year to $2.8 billion, which shows massive growth in their sales model. This continues the upward trend in revenue the company has enjoyed over the past four quarters. However, that trend is starting to slow; growth dropped by about 7 percentage points this quarter, indicating that current revenue streams may be topping off or starting to decline.
This problem compounded Uber’s spending. Since it’s a private company, the exact amount of expenses and losses wasn’t disclosed. However, it is clear that Uber is pouring a lot of cash into new markets like food delivery. The company has also heavily invested in new technology, like autonomous vehicles. The purchase of an electric bike rental startup added to expenses, which in sum cost the company almost $3.7 billion. The resultant profit was a massive $891 million dollar loss for the quarter.
However, Uber doesn’t seem too worried about these numbers. The renewed aggressive growth also hasn’t phased investors, who continue to be optimistic about the company’s future. According to Bloomberg, Uber has “burned through more than $11 billion” since 2009 but has managed to retain over $7.3 billion in cash. While $891 million may seem like a massive loss that would bankrupt dozens of other companies, it’s merely a drop in the bucket to the largest ride-sharing platform in the world.