Uber losses widen as incentives to lure drivers to hit revenues | Business and economic issues

Food and transportation delivery giant Uber Technologies reported a widening of losses for the second quarter, even as pilots returned to their platform in larger numbers.

Uber Technologies Inc., on Wednesday, reported a widening of losses even as travel and deliveries grew as drivers ’incentives touched revenues in the hail and food delivery company.

Uber posted a second-quarter adjusted loss of $ 509 million before interest, taxes, amortization and amortization – a metric that excludes one-time costs, including stock-based compensation – extending losses by nearly $ 150 million. million dollars from the first quarter.

Uber stock fell 6 percent in hourly activity after the close of the day to 2.2 percent.

Media analysts had expected the company to report adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of about $ 324.5 million, Refinitiv data show.

But the company reaffirmed its goal of hitting profit on an adjusted EBITDA basis later this year and said it would reduce losses to $ 100m in the third quarter.

Uber said pilots will return to its platform in greater numbers in July and that it expects the trend to continue in the coming months, along with strong food delivery orders.

This assumes that the more contagious Delta variant of the coronavirus does not reverse a gradual reopening of the U.S. economy, a problem that rival Lyft Inc. said Tuesday followed.

Uber said in an investor presentation that uncertainty from the Delta variant continues to influence visibility.

But investors are worried about the current shortage of drivers in the industry as demand grows. On Tuesday Lyft said it was expecting a limited supply of drivers in the next quarter.

Uber on Wednesday said monthly active drivers and food delivery workers had increased by 50 percent, or nearly 420,000 drivers from February to July.

Uber spent a massive $ 250 million in driver incentive investments in the second quarter, which increased losses in its travel business.

The company had ordered drivers to take advantage of the incentives before paying for pre-COVID-19 levels when more pilots return to the platform.

Uber’s delivery unit, which includes Uber Eats restaurant delivery service, has decreased quarterly losses and has more than doubled its gross bookings since last year.

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

Uber has doubled Uber Eats, which has been a pandemic winner, acquiring rivals Startmates Postmates and last-mile alcohol delivery company Drizly.

Uber is also expanding its food delivery business, after announcing partnerships with Albertsons Companies Inc and Costco Wholesale Corp.

In July, Uber also announced the acquisition of logistics company Transplace for about $ 2.25 billion to benefit its freight delivery unit, which is now expected to break even into an adjusted EBITDA base at the end of in 2022.

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