Shelagh Fogarty 1pm - 4pm
Uber Shares Tumble As It Makes $5bn Loss In Three Months
9 August 2019, 09:59
Shares in Uber have fallen by more than 10 per cent after the company recorded its largest-ever quarterly loss.
The ride-hailing firm lost $5.24bn in the last three-months.
Uber’s chief executive, Dara Khosrowshahi previously said that 2019 would be “our peak investment year and we think that 2020, 2021, you’ll see losses come down”.
Uber’s huge losses have worried investors and the company’s shares have only closed above their initial public offering (IPO) price of $45 twice since its share sale.
Notably Uber's costs rose by 147% to $8.65bn (£7.1bn) during the quarter.
This was partially due to one-off costs, such as $3.9bn (£3.2bn) of stock-based compensation expenses related to its IPO earlier this year and nearly $300m (£247m) in "driver appreciation" related to the stock sale.
But there was also a sharp rise in spending on research and development.
Last month the company announced it was cutting 400 jobs from its marketing team as it tried to get costs under control.
Investors are also concerned about slowing growth as the total revenue was up 14 per cent, below expectations.
But the second-quarter results also showed Uber Eats is seeing growing demand for rides and food.