Uber's loss grows in the 2nd quarter with greater incentives for drivers

Uber reported on Wednesday widening losses even as trips and deliveries grew as driver incentives hit revenue at the ride-hail and food delivery company

Photo: REUTERS/Brendan McDermid
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Uber reported on Wednesday in its earning conference an adjusted $509 million second-quarter loss before interest, taxes, depreciation and amortization, widening losses by nearly $150 million from the first quarter.

Analysts had expected the company to report an adjusted EBITDA loss of around $324.5 million, Refinitiv data showed. But Uber reaffirmed its goal of hitting profitability on an adjusted EBITDA basis at the end of this year and said it would reduce losses to $100 million in the third quarter.

According to the company, revenue grew 35% quarter over quarter and 105% year over year. Mobility revenue grew 90% QoQ and 106% YoY, and delivery revenue grew 13% QoQ and 122% YoY.

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Considering revenues by geographic region, Latin America was the region with the lowest revenue growth when comparing the second quarter of 2021 to 2020. Revenues increased from $213 million in the second quarter of last year to $307 million in the last three months, a growth of 44%. By comparison, revenues in the United States and Canada grew 76% and in Europe, the Middle East and Africa, 159%.

Delta variant’s threaten

Uber said riders returned to its platform in greater numbers in July and it expects the trend to continue in the coming months, together with strong food delivery orders. But the company warned investors that uncertainty from the Delta variant of the coronavirus continues to impact visibility into recovery.

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Uber spent a massive $250 million in driver incentive investment in the second quarter, which increased losses at its ride-hail business. Uber said mobility profitability will expand significantly as U.S. and Canadian driver investments fade, a trend it has witnessed in Australia and other markets.

“In Q2 we invested in recovery by investing in drivers and we made strong progress, with monthly active drivers and couriers in the US increasing by nearly 420,000 from February to July,” said Dara Khosrowshahi, CEO.

Delivery unit

Uber‘s delivery unit, which includes restaurant delivery service Uber Eats, narrowed losses on a quarterly basis and more than doubled gross bookings from last year.

Overall, the company reported second-quarter revenue of $3.9 billion, beating average analyst estimates of $3.75 billion, according to IBES data from Refinitiv.

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Uber doubled down on Uber Eats, which has been a pandemic winner, by acquiring rival startup Postmates and last-mile alcohol delivery company Drizly. Uber is also expanding its grocery delivery business, having announced partnerships with Albertsons Companies and Costco Wholesale.

In July, Uber also announced the acquisition of 100% of the Chilean grocery delivery startup Cornershop. Uber, which owned 53% of the app, is taking control of the startup through an operation worth more than $1.4 billion.

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