NEW YORK: Uber Technologies Inc reported a $5.2 billion loss and revenue that fell short of Wall Street targets on Thursday as growth in its core ride-hailing business slowed, sending its shares down 6%.
Uber’s net loss, up from a loss of $878 million a year earlier, reflected $3.9 billion of stock-based compensation expenses related to its IPO earlier this year, and Wedbush analyst Ygal Arounian said its loss before interest, tax, depreciation and amortization was in line with Wall Street targets.
Still, he said, “So far, mostly everything is below expectations.”
The figures caught investors off guard because smaller rival Lyft Inc on Wednesday had raised revenue expectations and described an easing price war, sending up shares of both companies during regular trade on Thursday.
Uber shares fell 5% after hours and Lyft dropped about half a percent. Uber had risen more than 8% and Lyft had gained 3% during the day.
Uber reported that revenue growth slowed to 14%, and the company’s core business, ride-hailing, grew revenue only 2% to $2.3 billion. If not for a 72% rise in revenue from food delivery unit Uber Eats, revenue would have dropped. Total revenue fell short of the average analyst estimate of $3.36 billion, according to IBES data from Refinitiv.
Gross bookings, a measure of total value of car rides, scooter and bicycle trips, food deliveries and other services before payments to drivers, restaurants and other expenses, rose 31% from a year earlier to $15.76 billion. Analysts on average were expecting $15.80 billion.
At the same time, Uber is keeping less money per car ride. The amount passengers spent on trips rose 20% while the amount Uber kept after paying its drivers increased just 4%.
Chief Executive Officer Dara Khosrowshahi said in a press call the competitive environment is starting to rationalize and it has been “progressively improving” since the first quarter.
Lyft on Wednesday said pricing had become “more rational”, meaning the company should spend less on promotions and incentives to win market share. It raised its revenue outlook on Wednesday.
Uber’s Khosrowshahi said the company is making its decision separate from Lyft.
Both the companies have historically relied on subsidization to attract riders and have been spending heavily to expand services into areas such as self-driving technology for Lyft and food delivery for Uber.