Uber takes a heavy loss, but its turnover delights Wall Street

Uber takes a heavy loss, but its turnover delights Wall Street

Despite a net loss of $2.6 billion in the second quarter, Uber more than doubled its revenue from April to June and far exceeded market expectations.

On Wall Street, the action of the giant car rentals with drivers and home meal delivery soared by nearly 15%, to 28.27 dollars, at the start of the session.

“We continue to benefit from increased demand for transporting people and things as well as the transition from an in-store spending model to a service spending model,” the Uber boss said. , Dara Khosrowshahi, in a statement.

“We intend to continue to take advantage of these favorable factors for our growth,” he added.

The group’s quarterly revenue of $8.1 billion was partly boosted by a change in the calculation of UK racing revenue, the company said.

The turnover related to car trips increased by 120%, to 3.6 billion dollars, and that related to meal deliveries (Uber Eats) rose by 37%, to 2.7 billion dollars.

Uber also made $1.8 billion in revenue from freight transportation.

The company also posted, for the first time, a positive free cash flow of 382 million dollars.

This measure is closely followed by the market, as it gives indications of a company’s ability to make new investments.

Mr. Khosrowshahi also welcomed the fact that Uber now has nearly 5 million drivers and couriers on its platform, a 31% increase compared to last year.

“We have seen an acceleration in the number of drivers, whether they are already active or new,” he said.

“In a global environment of high gas prices, this is resounding proof of the value that drivers continue to attribute to Uber,” he added.

During a conference call with Wall Street analysts, the leader said that more than 70% of new drivers had cited inflation as one of the reasons that led them to register on the platform.

“The cost of living plays a role,” acknowledged Khosrowshahi, who praised the “flexibility” offered by Uber.

The platform allows you to “earn money when you want, where you want and immediately and the compensation levels are quite attractive”, he detailed.

Uber has had to face legal proceedings in several countries for its refusal to grant employee status to its drivers, favoring self-employed status.

In 2021, the British justice imposed on the company to guarantee a minimum wage and paid holidays to its drivers, a world first.

– Contributions –

The Californian group continued to lose a lot of money between April and June.

Uber attributes the loss primarily to its stake in several financially faltering companies, including Singaporean ride-hailing platform Grab, U.S. self-driving vehicle startup Aurora and Indian restaurant aggregator Zomato.

Mr. Khosrowshahi warned in this regard that the profitability of the group could “continue to experience variations from quarter to quarter due to the large size of the holdings in our financial balance sheet”.

In the next quarter, Uber expects the total value of bookings made on its platform to be between $29 billion and $30 billion.

This would correspond to an increase of 25% to 30% over the whole year.

Its earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter should be between 440 million and 470 million dollars. This is better than the market forecast ($384 million).

For Dan Ives of Wedbush Securities, the group’s solid quarter shows that “despite an increase in the price of rides in the United States and Europe, consumers continue to use the Uber platform, particularly at a time when travel, back to the office and other post-pandemic trends are taking hold globally.”

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