Uber CEO: Massive losses from IPO were a once-in-a-lifetime hit

Uber CEO Dara Khosrowshahi called the company’s staggering $5.2 billion loss in the second quarter a “once-in-a-lifetime” hit as he tries to steer it …

“The founder mentality, that edge, that fire, is absolutely something we want to keep going at the company,” Khosrowshahi said. “It’s a big part of what made the company successful and I absolutely think it will play a big part in making the company successful moving forward.”

For the quarter, Uber posted a loss of $4.72 per share, which was larger than the loss of $3.12 per share estimated by analysts. Revenue came in light at $3.17 billion compared to consensus estimates of $3.36 billion.

The company reported a staggering $5.2 billion loss during the quarter, which was largely owed to stock-based compensation. While stock-related compensation costs are common among Silicon Valley companies, Uber’s losses were bigger than total 2018 losses for all but three S&P 500 companies.

Khosrowshahi continues to face increasing pressure from investors that he can get Uber on track to profitability. That’s likely to be a tough task, given that Uber has long subsidized its rides. He also addressed the stock’s lackluster performance since Uber’s IPO.

“We’ve got to do a better job as far as telling our story to the markets,” Khosrowshahi said. “Long term, the market will take care of itself, and I think that’s what we’re focused on right now.”

He said the company was recently forced to increase prices in New York City due to stricter regulations from the city’s Taxi and Limousine Commission. As a result, Uber has had to “restrict the number of drivers” that can enter the marketplace.

“I think it’s a tragedy. I think that when you put into law laws that are not market driven, you wind up helping special interests and hurting other people,” Khosrowshahi said. “The neighborhoods that need transit the most… our business is suffering there and that’s just not fair.”

In an interview with CNBC’s Deirdre Bosa on Thursday, Khosrowshahi said 2019 will be the company’s “peak investment year” and that losses should come down in 2020 and 2021. He added that he’s certain “the business will eventually be a break even and profitable business.”

Excluding stock-based compensation, Uber’s losses were approximately $1.3 billion, or about 30% worse than the prior quarter.

Related Posts:

  • No Related Posts