Uber is continuing to bleed cash during the coronavirus pandemic. The chronically unprofitable company lost $1.8 billion over the last three months, with its adjusted net revenues down 29 percent compared to Q2 of 2019. Even Uber’s successful delivery business, which saw revenues grow 162 percent year over year, wasn’t enough to buoy the company’s finances.
Gross bookings in its ride-hailing division, or the amount of money it takes in before paying drivers, fell 73 percent year over year. It’s a slight improvement over the first quarter, in which Uber’s ride-hailing business was down 80 percent. But there was no mistaking the impact of the coronavirus pandemic on the company’s core transportation business.
Meanwhile, gross bookings in its Uber Eats delivery business grew 113 percent year over year, thanks to increased demand for food deliveries. Uber CEO Dara Khosrowshahi highlighted the growth in food delivery in a call with investors.
“The COVID crisis has moved delivery from a luxury to a utility,” he said.
It wasn’t as grim a quarter as the first three months, in which Uber’s net loss was $2.9 billion. But it was a sign that widespread shutdown orders due to the pandemic and the rise in the number of COVID-19 cases in many markets, most notably the US, was continuing to depress the company’s finances.
“Mobility recovery is clearly dependent on the public health situation in any given area,” Khosrowshahi said.
Uber is scrambling to expand its food delivery options as the coronavirus pandemic continues to pummel its core ride-hailing business. The company acquired Postmates for $2.65 billion, and recently launched an on-demand grocery delivery service in Latin America and Canada as part of its acquisition of Cornershop.
Still, Uber’s problems pre-date the coronavirus crisis. The company has been under pressure from investors to stem its enormous losses and show how it can start posting a profit. Uber and Lyft, which both went public in 2019, have set records for the amount of money lost in the run-up to their respective IPOs. And since going public, both companies have continued to lose money, raising questions about the long-term sustainability of app-based ride-hailing as a business. Uber had to lay off around 1,000 workers last year amid restructuring efforts.
The company is also under increased regulatory scrutiny. Uber was recently sued, along with Lyft, by California’s attorney general for failing to comply with the state’s groundbreaking new gig work law that makes it harder for the company to classify drivers as independent contractors. Massachusetts also sued the companies for similar reasons. And the company also lost its license in London after regulators identified a “pattern of failures.”