Uber just had its IPO, and it does not seem that the company is earning the expected profits. The company on Thursday revealed its second quarterly earnings after the IPO and has reported a loss of worth $5.2 billion. Though the earned revenue for the second quarter earned is $3.17 billion, it is still less than the expected revenues, i.e. $3.36 billion.
The price of Uber’s every share had gone down to $42.98 per share from its IPO price, i.e. $45, and the company closed the quarter at 9%. The reported net loss is the biggest loss that the company has ever gone through.
Recently Lyft also came out with its revenue for the Q2 2019 and also reported a loss of $644 million. Being smaller in size, this loss for the company is equally also huge. If we took out the various expenses, like Uber mentioned, “stock-based compensation expenses for employees”, the two are still at loss, as Uber has lost around a $1.3 billion, which is 30% more than last year. And, the total loss for Lyft is around $197 million.
Uber has just earned a 14% growth up from its last year’s growth, whereas, Lyft has reported a 72% more growth compared to its last year’s growth, i.e. an $867 million.
“While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction,” said the Uber chief financial officer Nelson Chai.
Uber CEO Dara Khosrowshahi also made a similar statement and said, “We’re very confident that this company, at maturity, can be cash-flow positive.” Dara also said while talking to reporters, “We think that 2019 will be our peak investment year and we think that 2020, 2021, you’ll see losses come down. I think our break-even is something that we can push the company to break even if we really wanted to frankly.”
But is the company really experiencing any growth? In recent years, the pace of growth for the company has quite slowed down. Also, it had fired over 400 employees during the IPO as well. There have been more losses than profits in the entire journey of Uber, and it makes its position questionable in front of the investors.
Yashica is a Software Engineer turned Content Writer, who loves to write on social causes and expertise in writing technical stuff. She loves to watch movies and explore new places. She believes that you need to live once before you die. So experimenting with her life and career choices, she is trying to live her life to the fullest.