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posted by martyb on Monday August 10 2020, @07:49PM   Printer-friendly
from the that's-like-burning-two-$100-bills-AND-one-$20-bill-every-single-second dept.

Coronavirus clobbers Uber, leading to $1.8 billion quarterly loss:

The coronavirus pandemic hammered Uber's finances in the second quarter of 2020, the company announced on Thursday. Gross bookings for Uber's core ride-hailing business plunged by 75 percent compared with a year earlier—from $12.2 billion to $3 billion.

That was offset somewhat by rapid growth in Uber's delivery business. Delivery bookings more than doubled from $3.4 billion to $7 billion.

The company lost $1.8 billion in the second quarter on a GAAP basis. Ignoring one-time charges, Uber has been losing around $1 billion per quarter for the last couple of years.

[...] In May, Uber laid off 3,700 people in an effort to contain mounting losses.

Demand for rides cratered, while demand for deliveries soared. In his Thursday statement, Khosrowshahi argued that Uber's product portfolio had a "natural hedge" since people ordered more takeout even as they cut back on going out.

Still, Uber says that its rides business earned a $50 million profit on an EBITDA (earnings before interest, taxes, depreciation and amortization) basis. The problem is that this figure is nowhere close to offsetting losses and overhead elsewhere—including the delivery business and Uber's expensive self-driving project.

Fortunately, Uber is in no danger of running out of money; it has almost $8 billion in cash and short-term investments. It could easily burn cash at this rate for another year.


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  • (Score: 2) by Bot on Monday August 10 2020, @10:04PM (1 child)

    by Bot (3902) on Monday August 10 2020, @10:04PM (#1034548) Journal

    >We need to start prosecuting businesses that are running on a business model where they can run a deficit for many years in order to undercut the competition.

    quite true. Before widespread credit and banking you had your shop, adjusted prices based on those around you, the end. I know some old lady who never entered a supermarket for this very reason, when supermarket got built in the 70s she said: this will mark the end of us.
    She and luddists are right, but only eventually, so the rest of the people laughs at them while they slowly plunge into irrelevance.

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  • (Score: 0) by Anonymous Coward on Monday August 10 2020, @10:51PM

    by Anonymous Coward on Monday August 10 2020, @10:51PM (#1034588)

    Super markets had other issues that required people to shop there. Going to a butcher, a baker, the fruit stand and the rest really doesn't work very well if you have to work, back then it was more reasonable for people to be able to afford to buy a house on a single income meaning that you could have a wife that spent a lot of time going from shop to shop buying everything she needed. For the most part they did get where they were legitimately based upon actual scales of efficiency that were mostly passed down to the customers. Ones like Walmart are exceptions that mostly exist because they're willing to overlook profits in order to continue holding their political views. Walmart would be making a lot more money if they'd pay employees more and simply have fewer employees.