Uber posts US$1 bln loss for first quarter as costs rise

May 31, 2019 09:53
Uber saw costs soar 35 percent in the three months to March as it spent heavily in the run-up to its IPO earlier this month. Photo: Reuters

Ride-hailing services giant Uber on Thursday announced a US$1 billion loss for the three months to March on revenue of US$3.1 billion, issuing its first quarterly report as a publicly listed company.

Revenue matched the high end of the range that the firm had forecast for the period, and the loss was also in line with estimates.

Chief Executive Dara Khosrowshahi cited business improvements, but called 2019 an “investment year”, Reuters reports.

“Our story is simple. We’re the global player,” Khosrowshahi told analysts on his first earnings call after the company’s IPO earlier this month. “Our job is to grow fast at scale and more efficiently for a long, long time.”

Costs went up 35 percent in the quarter, as the company spent heavily in the run-up to its IPO. Gross bookings, a measure of total value of rides before driver costs and other expenses, rose 34 percent from a year ago to US$14.6 billion.

Bookings were up 3.4 percent from the previous quarter, showing the difficulty of recruiting new riders in saturated markets.

With its share price trading more than 10 percent below its IPO price of US$45, Khosrowshahi will have to convince investors Uber can turn a profit, given its reliance on rider incentives and competition in all parts of its business, Reuters noted.

In the mature US market, where Uber’s main rival is Lyft, Khosrowshahi said two levers for growth were the expansion of rides into suburbs and a generational wave, in which millennials show little interest in car ownership.

Overall, incentives paid to drivers more than doubled from a year earlier, outpacing revenue growth, as the company invested in its growing food delivery service, Uber Eats.

In that unit, driver incentives tripled to US$291 million while revenue rose 89 percent.

Uber was “very early in the stages” of exploiting how ride-hailing can help its Eats business, where take rates would improve over 2019, the CEO said.

The company said its monthly active users rose to 93 million globally, from 91 million at the end of the fourth quarter.

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