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August 8, 2020 01:25 am

Coronavirus Clobbers Uber, Leading To $1.8 Billion Quarterly Loss

In the second quarter of 2020, Uber announced that its ride-hailing business plunged by 75 percent compared with a year earlier -- from $12.2 billion to $3 billion. "That was offset somewhat by rapid growth in Uber's delivery business," reports Ars Technica. "Delivery bookings more than doubled from $3.4 billion to $7 billion." From the report: The company lost $1.8 billion in the second quarter on a GAAP basis. Ignoring one-time charges, Uber has been losing around $1 billion per quarter for the last couple of years. Prior to the pandemic, Uber CEO Dara Khosrowshahi was bullish about the company's financial future. After reporting a $1.1 billion loss for the fourth quarter of 2019, Khosrowshahi said in February that he expected Uber to start generating a profit by the end of 2020. At the time, Uber's rides business was (just barely) profitable. But it was being dragged down by big losses from Uber Eats, where Uber was spending heavily in pursuit of growth. Uber expected the rides business to become more profitable over time, while losses in the delivery business would decline as growth slowed. But then the coronavirus hit, and Uber was forced to throw those projections out the window. In May, Uber laid off 3,700 people in an effort to contain mounting losses. [...] Fortunately, Uber is in no danger of running out of money; it has almost $8 billion in cash and short-term investments. It could easily burn cash at this rate for another year.

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