Despite Cost-Saving Measures, Uber is Still Losing Money
Uber still avoids significant driver-related costs.
Despite making efforts to reduce spending, Uber said Wednesday that it is still losing money, according to Reuters. The news comes as Uber moves to go public in 2019 and continues to face criticism over allegedly low driver pay.
Uber's net loss in the second quarter, which ended June 30, was $891 million, down from $1.1 billion a year earlier. Its adjusted loss before interest, taxes, depreciation, and amortization was $614 million, compared to $773 million in 2017. Uber was able to narrow its losses, but profit still evades it.
Net revenue also rose more quickly than gross bookings, meaning Uber is making more money off each ride, largely because the company dialed back promotional subsidies, according to Reuters.
Uber remains the leader in global ride-hailing, and the company claims its drivers have completed over 10 billion trips. However, a recent study found that about half of those drivers make less than minimum wage once vehicle operating costs are factored in. Uber treats its drivers as freelancers, so it doesn't pay those costs, or offer benefits.
This past year has admittedly been one of upheaval for Uber. A scandal-ridden 2017 saw Travis Kalanick replaced as CEO by Dara Khosrowshahi. Uber has also recently sold its operations in Russia and Southeast Asia to local rivals and shuttered its self-driving truck program. While Kalanick pursued growth at all costs, Khosrowshahi has tried to refocus Uber's resources on a narrower set of markets and services anticipated to have greater earning potential.
At the same time, Uber has worked to expand into other businesses beyond ride-hailing. The self-driving truck program may be kaput, but the company is doubling down on its Uber Freight logistics business, which connects human truckers with cargo. Uber also bought bike-sharing startup Jump and is investing in Lime, which rents both bikes and scooters.
As Uber works to rejigger its operations and chases profitability, it faces increasing scrutiny from regulators. New York City recently voted to cap the number of cars from Uber and other ride-hailing services operating on its streets, and London Mayor Sadiq Khan would like to do the same. Nonetheless, Uber is still expected to do an initial public offering (IPO) next year.