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posted by Fnord666 on Saturday November 09 2019, @03:03PM   Printer-friendly
from the somewhat-less-unprofitable dept.

Arthur T Knackerbracket has found the following story:

Uber lost another $1.1 billion in the third quarter of 2019, the company announced on Monday. This wasn't a surprise: Uber lost about the same amount in the first quarter of 2019 and lost even more last quarter.

Yet the company argues that things aren't as bad as that headline figure suggests. To show why, Uber broke its earnings down by business area, distinguishing its core "rides" app from Uber Eats, Uber Freight, and other operations.

Uber says that, if you exclude certain non-operating expenses—mainly interest, depreciation, and stock-based compensation—the "rides" app actually earned a substantial $631 million profit. That's enough to cover the company's core operating expenses, the company said. But Uber's profitability was dragged down by losses in its other businesses—mainly a $316 million loss from Uber Eats.

Of course, interest, depreciation, and stock-based compensation are real costs. So the fact that Uber looks less unprofitable excluding them isn't going to be particularly reassuring to Uber investors.

But the reason these numbers could ultimately be good news for investors is that they suggest Uber's core rides business might not be perpetually money-losing. If the "EBIDTA" profitability of the ride-hailing business continues to improve—it grew from $416 million in the year-ago quarter to $631 million last quarter on an EBITDA basis—the company could eventually reach honest-to-goodness profitability.


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  • (Score: 2) by GlennC on Saturday November 09 2019, @06:19PM (3 children)

    by GlennC (3656) on Saturday November 09 2019, @06:19PM (#918346)

    For the drivers....well, nobody seems to care, they're just peasants.

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  • (Score: 1) by saturnalia0 on Saturday November 09 2019, @06:42PM

    by saturnalia0 (6571) on Saturday November 09 2019, @06:42PM (#918356)

    I don't know how it is in the US, but here in Brazil Uber came in just when the worst recession in the country's history hit the hardest. It meant (and still means) a lot of jobs to people who would otherwise be unemployed. To consumers it was great too, even at a time of economic distress, as the rides were incredibly cheap compared to the over regulated taxi industry (and Uber was subsidizing them). Not all large cities have metro here so people ride a lot.

  • (Score: 2) by Coward, Anonymous on Saturday November 09 2019, @10:06PM (1 child)

    by Coward, Anonymous (7017) on Saturday November 09 2019, @10:06PM (#918406) Journal

    Barrier to entry for competitors does not seem very high. They just need an app and some marketing. What secret sauce does Uber have that will let them make a lot of money? Amazon could easily roll out this kind of business if it was worthwhile.

    • (Score: 2) by Runaway1956 on Sunday November 10 2019, @04:33AM

      by Runaway1956 (2926) Subscriber Badge on Sunday November 10 2019, @04:33AM (#918524) Journal

      Secret sauce? Fads don't require a secret sauce. Everyone wanted in, and now Uber has name recognition. You might trump name recognition with better service, but first, word has to get out.