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Ride-hailing and food delivery giant Uber Technology reported that losses in the second quarter continued to expand, even as more passengers returned to its platform.
Uber Technology reported on Wednesday that even though the ride-hailing and meal delivery company’s revenues have increased due to driver incentives, travel and deliveries have increased, but losses are still widening.
Uber’s adjusted loss before interest, taxes, depreciation, and amortization for the second quarter announced was $509 million-this metric does not include one-time costs, including stock-based compensation-the loss was compared to the first quarter Expanded by nearly 150 million U.S. dollars.
Uber shares fell 6% in after-hours trading and closed 2.2%.
Refinitiv’s data shows that analysts on average expect the company to report earnings before interest, taxes, depreciation and amortization (EBITDA) losses of approximately $324.5 million.
However, the company reiterated its goal of achieving profitability based on adjusted EBITDA at the end of this year, and said it will reduce its loss to US$100 million in the third quarter.
Uber said that more passengers returned to its platform in July, and that this trend is expected to continue in the coming months, and takeaway orders are also strong.
This assumes that the more contagious delta variant of the coronavirus will not reverse the gradual reopening of the US economy, and rival Lyft Inc said Tuesday that it is monitoring this issue.
Uber stated in its investor presentation that the uncertainty of the Delta variant continues to affect visibility.
But as demand increases, investors are worried about the continued shortage of drivers in the industry. Lyft said on Tuesday that it expects a limited supply of drivers in the next quarter.
Uber said on Wednesday that from February to July, monthly active drivers and food delivery staff increased by 50%, or nearly 420,000 drivers.
Uber spent $250 million in driver incentive investments in the second quarter, which added to the loss of its ride-hailing business.
As more and more drivers return to the platform, the company has urged drivers to take advantage of these incentives before salaries drop to pre-COVID-19 levels.
Uber’s delivery division, including restaurant delivery service Uber Eats, has narrowed its quarterly losses and more than doubled its total bookings from last year.
According to Refinitiv’s IBES data, overall, the company reported revenue of US$3.9 billion in the second quarter, exceeding the average analyst estimate of US$3.75 billion.
Uber has redoubled its efforts on Uber Eats, the winner of the pandemic, by acquiring rival startup Postmates and last-mile liquor delivery company Drizly.
Uber is also expanding its grocery delivery business, announcing partnerships with Albertsons Companies Inc and Costco Wholesale Corp.
In July, Uber also announced the acquisition of logistics company Transplace for approximately US$2.25 billion, bringing good news to its freight department. It is currently expected that the department will achieve a breakeven based on the adjusted EBITDA at the end of 2022.
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