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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: 1, Insightful) by Anonymous Coward on Monday August 10 2020, @08:11PM (9 children)

    by Anonymous Coward on Monday August 10 2020, @08:11PM (#1034490)

    That is how much money people had to waste on a silly idea. "We want a taxi that isn't a taxi. We just want someone to come get us whenever we want, and we want to throw them some chump change for picking us up. We don't mind handing over billions of dollars to some fool who promises to manage these drivers, as long as we don't have to pay the drivers full taxi fee!"

    • (Score: 2) by takyon on Monday August 10 2020, @08:16PM

      by takyon (881) <reversethis-{gro ... s} {ta} {noykat}> on Monday August 10 2020, @08:16PM (#1034496) Journal

      It would have worked if GoogUber had kicked those pesky drivers into the gutter to die and rolled out the robot cars. Corona came just a little too soon.

      --
      [SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
    • (Score: 0) by Anonymous Coward on Monday August 10 2020, @09:39PM (6 children)

      by Anonymous Coward on Monday August 10 2020, @09:39PM (#1034538)

      I keep wondering how long it's going to be until venture capitalists stop throwing money at businesses that can't turn a profit and lack a business model. Disruption is not a business model and it's rather ridiculous that they keep being funded.

      • (Score: 0) by Anonymous Coward on Monday August 10 2020, @10:12PM

        by Anonymous Coward on Monday August 10 2020, @10:12PM (#1034554)

        As long as you have people with Stupid Money they didn't earn, you'll get people making stupid gambles - sorry, investments - and talking loudly about the ones they won.

      • (Score: 4, Insightful) by Mykl on Monday August 10 2020, @10:36PM (3 children)

        by Mykl (1112) on Monday August 10 2020, @10:36PM (#1034570)

        I for one am thankful that there are people willing to throw their money away. We will be able to build great things off the back of their write-offs.

        Governments are no longer interested in spending billions researching things that will advance humanity. Think of the billions spent on space research in the mid-20th century that eventually led to satellite technologies including GPS. Now we get to build the next great technologies off the back of VC money.

        As long as there are VC success stories like Facebook and Google, there will be VC money. Think of it like the rich person's version of playing the lottery.

        • (Score: 1, Insightful) by Anonymous Coward on Monday August 10 2020, @10:46PM (2 children)

          by Anonymous Coward on Monday August 10 2020, @10:46PM (#1034583)

          That's only because the same leeches are bribing them to prioritize war and tax cuts over long term investments in things that will benefit mankind. It's beyond fucked up that philanthropy covers things that are genuine problems of societal importance. Things like homelessness and poverty should be solved via government policies, not hoping that a billionaire will care enough to give back some of the ill begotten gains.

          • (Score: 2) by Mykl on Tuesday August 11 2020, @01:04AM (1 child)

            by Mykl (1112) on Tuesday August 11 2020, @01:04AM (#1034654)

            You need to move to a country that cares about its people. There are plenty of Western Democracies that do.

            • (Score: 0) by Anonymous Coward on Tuesday August 11 2020, @01:53PM

              by Anonymous Coward on Tuesday August 11 2020, @01:53PM (#1034901)

              Yes, but if all the sane folks do that, then god help us all. Just imagine a nuclear armed state where the motto is "hold my beer while I try this."

      • (Score: 4, Informative) by c0lo on Tuesday August 11 2020, @03:50AM

        by c0lo (156) Subscriber Badge on Tuesday August 11 2020, @03:50AM (#1034720) Journal

        I keep wondering how long it's going to be until venture capitalists stop throwing money at businesses that can't turn a profit and lack a business model.

        You totally misunderstood VC's game.
        Their product is hype, they cash out at the IPO stage (or early).
        The ones that see their money gone are various investment funds (pension funds included), which buy the public shares.

        --
        https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
    • (Score: 2) by corey on Monday August 10 2020, @11:10PM

      by corey (2202) on Monday August 10 2020, @11:10PM (#1034608)

      I would have thought this isn't much of a problem for them, because the drivers are subcontractors. If no customers, then no contractors. That part of the business is just in hibernation, no income, no/low liabilities. Meanwhile they continue to make money delivering food cold, then making the restaurant prepare another pack of food at the restaurants cost.

  • (Score: 0) by Anonymous Coward on Monday August 10 2020, @08:16PM (12 children)

    by Anonymous Coward on Monday August 10 2020, @08:16PM (#1034495)

    Yellow Cab is on the brink of failure.

    • (Score: 2) by PartTimeZombie on Monday August 10 2020, @08:34PM (5 children)

      by PartTimeZombie (4827) on Monday August 10 2020, @08:34PM (#1034507)

      $1.8 billion quarterly loss is fairly standard for Uber, and they have been quite open in the past about having no actual plan for ever making money.

      At some point the shareholders are going to figure out that no-one is quite stupid enough to buy their worthless shares and Uber will close down.

      • (Score: 0) by Anonymous Coward on Monday August 10 2020, @08:53PM

        by Anonymous Coward on Monday August 10 2020, @08:53PM (#1034521)

        Will they? In the sillycunt valley economy, founders keep all the voting shares, and Nasdaq index funds have to buy the shares because the inflated market cap.

      • (Score: 0) by Anonymous Coward on Monday August 10 2020, @09:41PM (2 children)

        by Anonymous Coward on Monday August 10 2020, @09:41PM (#1034540)

        I'm a bit surprised that none of the cab companies have filed an antitrust lawsuit against them. They barely pay the drivers, don't pay for the cars, they lacked licenses and insurance and they're running huge deficits quarter after quarter.

        • (Score: 0) by Anonymous Coward on Monday August 10 2020, @09:53PM (1 child)

          by Anonymous Coward on Monday August 10 2020, @09:53PM (#1034544)

          I believe they did fight to keep their own unfair monopolies, but the governor and mayor of this city let Über and Lyft operate illegally, commanding the PUC to not enforce the laws. They were hoping for them to open R&D offices in their taxing jurisdiction.

          • (Score: 2) by PartTimeZombie on Tuesday August 11 2020, @01:08AM

            by PartTimeZombie (4827) on Tuesday August 11 2020, @01:08AM (#1034656)

            Where I live the taxis regulations have been pretty good for 20 years or so and Uber struggles to keep drivers because of the low pay.

            People still use Uber despite it not being cheaper or easier than getting a taxi.

      • (Score: 0) by Anonymous Coward on Tuesday August 11 2020, @02:39AM

        by Anonymous Coward on Tuesday August 11 2020, @02:39AM (#1034689)

        "At some point the shareholders are going to figure out that no-one is quite stupid enough to buy their worthless shares and Uber will close down."

        You assume the market is rational. The market can stay irrational longer than you can stay solvent.

    • (Score: 0) by Anonymous Coward on Monday August 10 2020, @08:49PM (2 children)

      by Anonymous Coward on Monday August 10 2020, @08:49PM (#1034517)

      Which Yellow Cab company? According to this, the company was split into many smaller ones in the last ~5 years,
          https://en.wikipedia.org/wiki/Yellow_Cab_Company [wikipedia.org]

      • (Score: 0) by Anonymous Coward on Monday August 10 2020, @09:12PM (1 child)

        by Anonymous Coward on Monday August 10 2020, @09:12PM (#1034532)

        New York, where they've been hit hardest.

        • (Score: 0) by Anonymous Coward on Monday August 10 2020, @10:09PM

          by Anonymous Coward on Monday August 10 2020, @10:09PM (#1034551)

          There *may* be a company in NYC called the "Yellow Cab Company," but they don't own/control the ~14,000 yellow cabs.

          Your ignorance is showing.

          https://en.wikipedia.org/wiki/Taxicabs_of_New_York_City [wikipedia.org]

    • (Score: -1, Troll) by Ethanol-fueled on Monday August 10 2020, @09:37PM (2 children)

      by Ethanol-fueled (2792) on Monday August 10 2020, @09:37PM (#1034537) Homepage

      And good riddance. Yellow cabbies (hell, all cabbies) were fucking worthless before ridesharing, in fact they were so fucking worthless it made me wonder if they were cover for a CIA or other globalist money-laundering operation using bulbheads to provide cover or smuggle arms or something.

      All they had do to stay relevant was for their dispatchers to answer their fucking phones, and they couldn't even make that happen. But if you made one of the lucky 10% of calls that did get answered, they told you the cab would be there in 30 minutes. If you were one of the other lucky 10%, then a driver would show up 2 hours later (with cabbies it's either 2 hours late or not at all). And don't even get me started on the time I found a whole parking lot of them, ostensibly "on their shifts," shooting dice in a parking lot. All I needed was a 10 mile ride from one of them, and even that took Kissinger-tier levels of diplomacy to make happen.

      • (Score: 2) by Bot on Monday August 10 2020, @09:51PM

        by Bot (3902) on Monday August 10 2020, @09:51PM (#1034543) Journal

        Taxi service is OK here in the Italian NE. Back in the day in Rome, there was a column of taxis patiently waiting for me and family to drag our cases towards their parking spot. They had seen us and made no effort to come get us. An empty cab passes by, asks us if we need a ride, we say yeah indeed, he starts to take us onboard and the first taxi of the queue moves towards us and starts screaming at the cab driver for stealing his clients. Needless to say we ignored the lazy ass taxi guy.

        This and other episodes in Rome and Venice and Paris convinced me not to give tourist oriented big cities any more money than is necessary. You are just a number for them, because no matter how good they treat you, it's probably the last time you meet each other.

        --
        Account abandoned.
      • (Score: 2) by Runaway1956 on Monday August 10 2020, @10:58PM

        by Runaway1956 (2926) Subscriber Badge on Monday August 10 2020, @10:58PM (#1034596) Journal

        FFS, EF, you're in SAN FUCKING DIEGO!! One of the lesser fiefdoms of Californication. Your experiences do not reflect life in the United States.

  • (Score: 2, Insightful) by fustakrakich on Monday August 10 2020, @08:34PM (6 children)

    by fustakrakich (6150) on Monday August 10 2020, @08:34PM (#1034508) Journal

    The only people that will get screwed are those that invested their own real money. The rest will be bailed out by the fed (you and me)

    --
    La politica e i criminali sono la stessa cosa..
    • (Score: 0) by Anonymous Coward on Monday August 10 2020, @09:45PM (5 children)

      by Anonymous Coward on Monday August 10 2020, @09:45PM (#1034541)

      You mean other than the cabbies that have to deal with the unfair competition, right? 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. If you're going to undercut the competition, then you'd better be able to do it honestly with a better process or greater efficiencies. Stiffing the workers and borrowing large sums of money shouldn't be acceptable.

      • (Score: 2, Interesting) by fustakrakich on Monday August 10 2020, @09:53PM (1 child)

        by fustakrakich (6150) on Monday August 10 2020, @09:53PM (#1034545) Journal

        You mean other than the cabbies that have to deal with the unfair competition, right?

        Yeah, they get fucked too, just like every mom & pop when Walmart shows up. Everybody's enjoying the "everyday low prices" too much to care about it.

        But this "1.8 bil" is made up of three dollar bills. These "losses" are only on the books to evade taxes

        --
        La politica e i criminali sono la stessa cosa..
        • (Score: 0) by Anonymous Coward on Tuesday August 11 2020, @02:48AM

          by Anonymous Coward on Tuesday August 11 2020, @02:48AM (#1034695)

          "These "losses" are only on the books to evade taxes"

          Evade or avoid? If you mean evade are you suggesting that these companies should be prosecuted for tax evasion? If you mean avoid are you suggesting that the tax laws should be adjusted accordingly?

      • (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.

        --
        Account abandoned.
        • (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.

      • (Score: 0) by Anonymous Coward on Tuesday August 11 2020, @02:46AM

        by Anonymous Coward on Tuesday August 11 2020, @02:46AM (#1034692)

        The same thing can be said about Tesla and many other companies. Tesla was unprofitable for many years before they eventually turned a profit. There are many publicly traded companies that have relatively consistent negative earnings.

  • (Score: 0) by Anonymous Coward on Monday August 10 2020, @08:57PM (1 child)

    by Anonymous Coward on Monday August 10 2020, @08:57PM (#1034523)

    Problem with "disruptive technology": lack of control. Like Skynet, it might just turn around and disrupt its creator.

    • (Score: 2) by Bot on Monday August 10 2020, @09:39PM

      by Bot (3902) on Monday August 10 2020, @09:39PM (#1034539) Journal

      one can only hope...

      --
      Account abandoned.
  • (Score: -1, Troll) by Ethanol-fueled on Monday August 10 2020, @09:28PM (1 child)

    by Ethanol-fueled (2792) on Monday August 10 2020, @09:28PM (#1034535) Homepage

    Recently went on a Lyft ride. Where previously a driver would have arrived in seconds or minutes, we had to wait 40 minutes just to be picked up.

    Driver told us that he came out from afar and that nobody's driving anymore because they were all making way more on unemployment + extra goodies than driving, so what was the fucking point? And I'm in total agreement with that, because if you work a shit job like grocery or Lyft making pennies to deal with assholes all day, even getting 75% of what you were making is preferable to working and nobody should be chastised for wanting to be unemployed if they are making more doing nothing than working.

    The fear of COVID within the rideshare vehicle is only a small part of rideshare's problems. Why would you drive rideshare if none of the fucking places people want to visit are open? You might as well be unemployed if you ain't drivin' no rides. Cars are a necessity in my city, and anybody who gets an Uber or Lyft does so because they want to get trashed. With only curbside restaurants open, you're going to have 2 beers and a meal over the course of 2 or 3 hours so fuck ridesharing as long as you can drive, and if you want to really get drunk than liquor stores and small gatherings indoors are the way to go.

    • (Score: 3, Informative) by JoeMerchant on Monday August 10 2020, @11:19PM

      by JoeMerchant (3937) on Monday August 10 2020, @11:19PM (#1034610)

      if you work a shit job like grocery or Lyft making pennies to deal with assholes all day, even getting 75% of what you were making is preferable to working and nobody should be chastised for wanting to be unemployed if they are making more doing nothing than working.

      Agreed - and from my perspective, this is an argument FOR UBI. We shouldn't have a bunch of people doing shit jobs just to eek out a living, particularly shit jobs that have them burning fossil fuel all day at barely profitable rates.

      If Uber/Lyft is providing a valuable service, people will pay valuable rates for it. The only winners in a race to the bottom are the people who don't participate.

      --
      🌻🌻 [google.com]
  • (Score: 2) by richtopia on Monday August 10 2020, @10:33PM

    by richtopia (3160) on Monday August 10 2020, @10:33PM (#1034567) Homepage Journal

    If I were an Uber investor (and I am not, it sounds like a terrible idea), I would take this not as a loss but a demonstration of Uber's ability to shift. In one quarter, their core business dropped, but the Uber Eats business more than doubled. Uber is large and flush with cash, so there is little risk of going under during the COVID-19 travel shutter. The ride hailing will most likely recover as staying at home fades out. The positive outlook is that more people are using Uber Eats, and the majority will likely continue to do so even as COVID-19 becomes less of a concern.

    If anything I would be disappointed that Uber is not attempting to innovate more. This is an unprecedented time for jobbing out menial tasks as people are willing to pay others to take the risk of public interaction during a pandemic. There must be other markets beyond fast food that Uber could serve, and potentially keep serving outside of the COVID-19 atmosphere.

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