UBER Uber Technologies Inc

By Preetika Rana 

Uber Technologies Inc. posted another big loss with little sign of recovery in its core ride-hailing business as the coronavirus pandemic drags on.

Gross bookings for Uber's rides plunged 75% year-over-year in the three months ended June 30, the San Francisco-based company said Thursday, With the entire second quarter affected by the Covid-19 outbreak, bookings fell 72% from the first quarter when the pandemic first struck.

Uber Chief Executive Dara Khosrowshahi in May said there were early signs of recovery in ridership as some jurisdictions were easing shelter-in-place measures. But rising Covid-19 infection rates have hit that recovery, keeping ridership subdued.

Total quarterly revenue fell 29% to $2.24 billion from $3.17 billion in the year-ago period. Overall gross bookings, including Uber's food delivery business and other operations, declined 35% year-over-year to $10.22 billion. The results were broadly in line with Wall Street's already muted expectations. Analysts surveyed by FactSet had forecast revenue at $2.08 billion and gross bookings at $10.53 billion.

Uber posted a $1.8 billion net loss, far smaller than the year ago period when one-time costs from its initial public offering drove its largest-ever three-month loss. Stripping out one-time costs, its second-quarter adjusted loss before interest, taxes, depreciation and amortization widened in the most recent June quarter to $837 million compared with a $656 million adjusted loss in the year-ago period.

Mr. Khosrowshahi had vowed to make Uber profitable on an adjusted Ebitda basis before the end of the year, but withdrew that forecast in April because of the health crisis. On Thursday, the company reaffirmed its hope to reach that milestone next year. Uber introduced a host of measures in May to save more than $1 billion in fixed costs, including far-reaching job cuts. The company booked $382 million in restructuring costs in the second quarter linked to its efforts to become leaner.

The rides segment, despite plummeting ridership, remained profitable on an adjusted basis, signally the company's decision before the pandemic to focus on profitable growth after years of losses is showing results.

Uber's food-delivery business has been a bright spot during the pandemic, with people stuck at home. Bookings more than doubled year over year and advanced 49% over the first quarter. "As some people stay closer to home, more people are ordering from Uber Eats than ever before," Mr. Khosrowshahi said.

The Eats segment lost $232 million in the quarter on an adjusted basis in the cutthroat food-delivery market where profit has largely been elusive. Uber has tried to trim those losses, and the second-quarter results were the best three-month performance for its Eats business.

Last month, Uber agreed to acquire rival Postmates Inc. in a tie-up that would allow the company to find savings amid the costly work of building out a delivery empire and to compete with deep-pocketed rivals. The $2.65 billion all-stock deal is expected to close next year. Uber was vying to buy Grubhub Inc., but was beat out by Dutch food-delivery giant Just Eat Takeaway.com NV in a $7 billion deal.

Falling ridership during the pandemic and fierce competition in its food-delivery business aren't Uber's only headaches. Regulators also have Uber and other so-called gig-economy companies in their crosshairs for allegedly misclassifying their workers as independent contractors instead of employees.

On Wednesday, California's Labor Commission said it was suing Uber and rival Lyft Inc. for misclassifying their drivers in that way. The state's new gig-economy law, which took effect Jan. 1, seeks to force the companies to classify drivers as employees, making them eligible for benefits such as paid sick leave and health insurance -- issues that became front-and-center during the pandemic.

Uber and Lyft have said their drivers are properly classified under the law. Still, the ride-hailing companies have joined other startups that rely on gig workers and raised more than $110 million to back a ballot initiative for November, asking that voters exempt them from the law.

Write to Preetika Rana at preetika.rana@wsj.com

(END) Dow Jones Newswires

August 06, 2020 16:21 ET (20:21 GMT)

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