Uber narrows loss to $645m despite scandals

2017-08-24 12:18 - Eric Newcomer, Bloomberg
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San Francisco - Even as Uber’s investors mounted a revolt against the then-chief executive officer over a string of self-inflicted scandals, the ride-hailing company’s financial performance continued to improve in the second quarter of the year, based on financial results provided by the company.

Uber generated $1.75bn in adjusted net revenue in the second quarter of this year, up 17% from the prior quarter. Uber narrowed losses by 9% to $645m.

Travis Kalanick, Uber’s co-founder, resigned as CEO on June 20, only several days before the end of the second quarter.

READ: Uber CEO resigns from ride-sharing startup

The results show that Uber continued to make progress on narrowing its losses while growing its business, even as the company responded to a relentless cascade of scandals. 

Kalanick stepped down after a group of investors led by venture capital firm Benchmark demanded his resignation. He has since tried to hang on to the three board seats he controls even as Benchmark sues him for fraud. Other investors have signalled concerns as well. Multiple mutual funds backing Uber recently marked down the value of their stock by as much as 15%.

READ: Uber's Kalanick calls Benchmark lawsuit a 'fabrication'

Uber’s many crises have emboldened the company’s competitors. China’s Didi Chuxing raised $5bn this year, while Lyft has attempted to seize on Uber’s many stumbles, donating $1m to the American Civil Liberties Union after Uber was criticiSed for its ties to the Trump administration, for instance.

An executive committee is steering Uber as it searches for a CEO. The group has been taking steps to fend off rivals and rehabilitate the company’s image. It bent to mounting pressure from drivers in June by adding the option for customers to tip within the app. Uber said it has paid out more than $50m in gratuity since then.

Among Uber’s biggest costs: India, Southeast Asia, discounts for passengers and bonuses for drivers, insurance payments, employee salaries and self-driving car research. Uber doesn’t include the cost of stock-based compensation in its losses.

At the end of the second quarter, Uber had $6.6bn cash on hand. The company’s gross bookings, the total money taken in fares, reached $8.7bn, an increase of 17% from the prior quarter.

Uber, which remains a private company, has been doling out its financial results to news outlets every quarter after years of periodic leaks. Internet media startup Axios first reported this quarter’s financials on Wednesday.

Uber has been searching for a chief financial officer. Its head of finance, Gautam Gupta, left Uber this year for the startup OpenDoor. He was replaced temporarily by Prabir Adarkar, whose promotion to vice president was announced to the company on Tuesday.

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