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Surprising No One, Uber Continues to Hemorrhage Cash

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Uber CEO Dara Khosrowshahi at the Global Business Forum in September 2019.
Uber CEO Dara Khosrowshahi at the Global Business Forum in September 2019.
Photo: Mark Lennihan (AP)

Beleaguered ride-sharing giant Uber continued to torch cash like an outdated Joker reference in Q3 2019, but it claims that the news is positive because parts of its business would technically be profitable if one looked past all the ways it’s losing money.

In quarterly results posted on Monday, Uber reported a net loss of roughly $1.2 billion—which the Wall Street Journal reported beat many analysts’ expectations, but still stood as the third-largest since it began issuing reports in 2017. That’s significantly better than its last quarter, in which it cast $5.2 billion into the flames, though it’s not much of an improvement when considering that quarter’s one-time charge of $3.9 billion for stock compensation.


Uber reported that its core ride-sharing business is now profitable to the tune of $631 million on revenue of $2.9 billion, but only when excluding major categories of non-operating expenditures such as interest, depreciation, and stock-based compensation. That $631 million number, which again exists only in theory, is higher than its Q3 2018 total of $416 million.

As Ars Technica noted, these are real costs that can’t be discounted and will continue to dog Uber’s business. Uber is also being dragged down by massive losses in its Uber Eats business, which lost $316 million, fueled largely by expansion costs.


Excluding interest, taxes, depreciation and amortization (EBITDA), the Journal wrote, Uber’s total loss was $585 million. That is worse than the same quarter last year, when it lost $458 million. Uber now projects its entire business will be profitable in 2021 on that EBITDA basis, though all of its various arms are facing vicious competition and the Associated Press reported CEO Dara Koshrowshahi “provided few details on how different units within Uber would change for the company to reach its new profitability target.”

The company debuted in its May 2019 initial public offering at $45 a share before immediately taking heavy losses. Investors do not seem particularly reassured by the latest report, with stock again falling (standing at after-hours trading on Monday night at about $29.37). 

According to the Journal, Uber is also also on the precipice of its IPO “lockup” period, which expires on Wednesday. At that time, major shareholders like corporate officials and big investors will be free to begin dumping shares. Reuters reported that some analysts believe over 80 percent of the company’s outstanding shares will become eligible to hit the market. That could spell out very bad news for Uber, even if only a relatively small number of outstanding shares are dumped.

“For a company where investors are already skeptical, they needed to come out with an A-plus quarter and instead it was a B-minus,” Wedbush Securities analyst Dan Ives told the Washington Post. “This, as a precursor to Wednesday’s lockup—there are lots of agita from investors, and this quarter did not soothe those fears.”


Regulatory backlash has also hit Uber hard, with its home state of California recently passing Assembly Bill 5 into law. That law aims to force the company from continuing to classify its taxi and delivery drivers as independent contractors responsible for eating many of its costs, rather than as employees, which would devastate Uber and other gig-economy companies’ business models. Uber has claimed it is exempt from the bill on the patently ridiculous argument that it is a “platform” rather than a transportation company, and is planning on fighting back in court and with its own cash-fueled referendum drive.