Uber reports billions in losses. With a driverless future far away, will investors balk?

The same huge losses came for Lyft as well: Two months after the competitor went public, it reported 1.14 billion dollars in losses. Lyft’s latest earnings …

SALT LAKE CITY — Ride-sharing companies are hemorrhaging money.

Uber posted its quarterly earnings on Thursday, making headlines for a $5 billion loss and slowed growth. The bulk of the losses can be attributed by payouts related to its initial public offering, but the company still spent enormous sums on development.

The same huge losses came for Lyft as well: Two months after the competitor went public, it reported 1.14 billion dollars in losses. Lyft’s latest earnings release, however, showed growth, and its losses are slowly declining.

Investors are wary and were concerned prior to the latest earnings. Uber’s IPO was called “hugely dissapointing” by CNN Business. Whether these companies will ever become profitable has been a looming question for some time, and it depends in large part on automation, in which both companies have been investing heavily. And whether they can deliver in time to reassure investors could be the key to their survival.

The ability to regularly get into the back of a driverless car is supposed to be right around the corner. Or at least, that’s the promise implicitly made by companies like Uber and Lyft. In one SEC filing, Lyft identifies the failure to develop autonomous vehicles “in a timely manner” as a risk factor. Uber pointed to the same risk factor if they fail to “successfully commercialize autonomous vehicle technologies.”

Ride-sharing apps are also numerous. Yes, Uber and Lyft are the biggest players, but in cities like New York, one can quickly accumulate four or five apps on their phone. I once had four — Juno, Via, Uber and Lyft — and would click between them, looking for the cheapest price or promo code. As one Washington Post columnist wrote, there is “fierce competition over every single ride.” The loyalty of riders remains in question, and the nature of the platforms makes it easy to quickly choose one over the other. As consumers have repeated over and over again, they are simply looking for the cheapest, easiest option.

Patrick Semansky, Associated Press

This March 20, 2018, file photo shows the Uber app on an iPad in Baltimore. Uber is about to embark on a wild ride on Wall Street with the biggest and most hotly debated IPO in years. Uber’s shares begin trading on the New York Stock Exchange, Friday, May 10, 2019.

One bright spot for companies is a recent Pew study that showed 36% of Americans have now used a ride-sharing app, astonishing growth from 2015 when just 15% had ever used the service and many did not know that ride-sharing apps existed.

The crowded market and ease of switching from one service to another has forced Uber and Lyft to compete on price, cannibalizing their profit margins.

Faith in Uber and Lyft’s ability to become profitable does not rest on the current mode of doing business, though. A company that has been pilloried for paying drivers low wages, posts consistent losses, and in theory should have few operating costs, shouldn’t look promising. But in the new business model of the digital age, the thing a company is currently making, creating or selling is not always the thing they are pitching to investors — and in this case, driverless vehicles are the real promise.

Bring this idea up to anyone in Silicon Valley and they will point to Amazon. It started off selling books, but what it was really pitching was domination and expansion of something that didn’t really exist yet — an online marketplace that customers would visit before the physical store.

At a tech conference, Uber’s CEO Dara Khosrowshahi said, “Cars are to us what books were to Amazon. Just like Amazon was able to build this extraordinary infrastructure first on the back of books and they went into additional categories, you’re going to see the same thing coming from Uber.” The mega-valuations of profitless companies demand a kind of domination, a monopolizing of markets, to ever live up to the potential.

Richard Drew, Associated Press

FILE – This Tuesday, June 12, 2018, file photo shows the Uber app on a phone in New York. Uber on Thursday, April 18, 2019, said that it is releasing a new feature to help riders ensure they’re getting into the right vehicles. The development comes several weeks after a University of South Carolina student was killed after getting into a car she had mistaken for the Uber ride she hailed.

But what if the thing ride-sharing companies are promising can’t be delivered, or at least not fast enough to keep afloat? Elon Musk has been optimistically announcing the advent of fully autonomous vehicles almost every year — they were coming in 2018, then 2019, and now 2020 will be the year they finally make their debut.

The autonomous vehicle marketplace is also very crowded. Over 60 companies have been given permits in California to test autonomous vehicles. The latest news reports are now predicting that automated taxis won’t be available until 2025, and it will be a decade until consumers can purchase their very own driverless vehicles.

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Regulations will create additional hurdles and public perception of fatal accidents. Last year an Uber autonomous vehicle killed a woman crossing the street in Arizona. As more autonomous cars grace the roads, more accidents are inevitable — and the question looms of how much the public will tolerate.

None of these factors are exactly new, but now that ride-sharing companies are public, there is increased scrutiny. The appetite for quarter after quarter losses may be coming to an end. But if investors are patient with Uber and Lyft and place the kind of faith in them that the markets placed in Jeff Bezos more than 20 years ago, they may yet see a return.

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Law enforcement investigate rideshare at OIA

ORLANDO, Fla. (FOX 35 ORLANDO) – Uber and Lyft are popular ways to get around Orlando, but the rideshare business can be cut-throat. Police say …

ORLANDO, Fla. (FOX 35 ORLANDO) – Uber and Lyft are popular ways to get around Orlando, but the rideshare business can be cut-throat. Police say some drivers could be breaking the rules, putting your safety on the line.

Is your Uber driver who he says he is? In July, FOX 35 reported on the rideshare lot at Orlando International Airport and the illegal parking happening now. On Friday, Orlando Police and federal authorities raided the lot, finding more issues than just illegal parking.

The airport records department told FOX 35 last month it received up to 3,000-plus pages of calls for service to the lot in the last year. That included calls for overcrowding and double parking. Now, FOX 35 is learning the Orlando Police Tactical Unit, Airport Patrol, Customs and Border Patrol and ICE raided the lot.

Investigators received reports of people hacking into Uber and Lyft to steal rides from drivers. Police say the people used multiple phones to take fares from legitimate Uber and Lyft drivers.

In the lot on Friday, 21 people were contacted. Eight warnings were issued for loitering. Nine abandoned cell phones were found in bushes and trees around the lot. No one was arrested.

Lyft sent us the following statement Friday:

“While we are actively investigating these reports, we have no reason to believe the allegations of hacking are accurate. We stand ready to assist the airport and law enforcement.”

FOX 35 reached out to Uber, which sent us the following statement:

“Fraud is not tolerated on our platform, including situations like this one though it did not involve hacking. Anyone who participates in fraudulent activity of any kind on our app is in clear violation of our Community Guidelines and will be removed from the platform. We continue to improve our fraud detection and prevention systems to protect honest drivers from the small number trying to gain an unfair advantage.”

Orlando police detectives say they expect to release more information on Monday. The investigation is ongoing.

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Uber And Lyft Earnings Tell Tales Of Two Strategies

In what seems to be shaping up to be a modern-day version of The Beatles vs. The Rolling Stones, Uber and Lyft have put out their numbers for the …

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In what seems to be shaping up to be a modern-day version of The Beatles vs. The Rolling Stones, Uber and Lyft have put out their numbers for the latest quarter, and depending on where you look, or what niche you examine, or what line item you favor, one or the other is a winner.

The initial reaction, at least from investors, is akin to voting with feet. As of this writing, shares of Uber were down 10 percent in intraday trading Friday (Aug. 9). In terms of headline numbers, Uber logged its biggest quarterly loss, at $5 billion, and where sales were up 14 percent, costs were up 150 percent. Revenues were $3.2 billion; the Street had expected $3.3 billion. The loss per share came in at $4.72, quite a bit worse than the $3.12 expected. Stripping out stock-based comp shows that the company lost $1.3 billion in the quarter.

Here’s a mirror image: Lyft beat on those stats, at least as measured against the Street. The company said earlier in the week that revenues were up 72 percent to $867.3 million, better than the $809.4 million Wall Street expected. The adjusted loss per share was better than Wall Street had seen, too, at 68 cents, while the Street had forecast $1 a share in losses.

Drill down a bit and there are some commonalities among business models that are diverging (more on this in a moment). Ridership is up amid a shift away from vehicle ownership. For Uber, bookings were up 35 percent, active users were up 30 percent and trips taken gained 35 percent to 1.7 billion. Lyft said in its own statement that active riders gained 41 percent, and revenues per active rider were up 22 percent.

The competitive environment, too, got a nod from executives at both companies. Lyft CFO Brian Roberts said that the company has been able to institute pricing increases in a few select markets, beginning in June. Lyft said its guidance for sales and marketing was coming down a full 800 basis points, which speaks volumes to a ride-hailing landscape that is becoming more rational. Uber said for its own part that promotional expenses were also down. Said the Uber CEO: “We are seeing the competitive environment in general, be more constructive and … that always helps as well. The combination of better science, better marketing, and a more constructive environment, we think, makes for a decent to hopefully better than decent second half for us.”

For Lyft, the strategy crystalizes along transport and management has said that revenue per active rider remains a key driver of results. New use cases may emerge with, say, uptake in using Lyft for non-emergency medical transportation.

Lyft CEO Logan Green said during this week’s call that “for more and more of our riders, Lyft is becoming a bigger part of how they get from point A to point B,” spanning “shared saver rides” and bikes and scooters. On this last front, he said, scooters are live in 16 markets. The company’s transport focus also is evident from commentary that it is putting more effort into Lyft Business, and on the strategy that the end-user may change but the needs are the same.

As CFO Roberts said on the call, in general, “we have strong core growth in the U.S. ridesharing industry. I’m sure you look at the same surveys that we do in terms of what percentage of the U.S. population have never tried ridesharing. And as we described, and I think as you can see in our S-1, it’s one of those products that people will try it for the first time. Maybe they’ve had a drink too many on a weekend, and they tried ridesharing, and then they just discovered how much easier it is to use Lyft to go to the airport or use Lyft to go to a medical appointment, et cetera. And it just — we tend to see usage go up over time.”

The difference in strategy is spotlighted across a few metrics. Lyft uses revenue per rider (again, its existence is based on riders), while Uber measures its progress in terms of platform user results.

As has been well documented, Uber has been busy developing a platform model — beyond the core platform of ridesharing and Uber Eats. Some observers may have, as of Friday, been concerned with slowing growth, at 22 percent in the latest quarter (constant currency) where once it had been about 54 percent in the second quarter last year, but it has accelerated through the last few sequential quarters. Of course as with any platform model, scale matters. Gross bookings were up 37 percent, the company said.

“In July, the Uber platform reached over 100 million monthly active platform Consumers for the first time, as we become a more and more integral part of everyday life in cities around the world,” CEO Dara Khosrowshahi said on the call. Management also illuminated cross-pollination, where Uber Eats and Uber Ridesharing by rewards spurred consumers enrolled in the program to be twice as likely as to be active on both Rides and Eats. Eats has showed particular traction, up 140 percent, with 40 percent of individuals never having previously tried the services before. The company also said that Uber Freight is making headway but did not disclose numbers on the call.

The multi-pronged approach also requires continued investment, management said.

For Uber and Lyft, the road stretches ahead, marked by divergent paths and strategies.

Officers Investigate Uber/Lyft Lot Scam at Orlando International Airport

Eight people were trespassed from Orlando International Airport property Friday after they were determined to be trying to bypass the Uber/Lyft lot …

ORLANDO, Fla. — Eight people were trespassed from Orlando International Airport property Friday after they were determined to be trying to bypass the Uber/Lyft lot rules to earn extra money, police say.

  • Police: Uber/Lyft drivers trying to bypass OIA rideshare queue rules
  • Detectives: Some drivers were using multiple phones to make more money
  • Investigators found discarded phones in bushes next to rideshare lot

Orlando Police said Friday that one of its airport units got information that there was illegal activity going on at the designated rideshare lot at 8301 Bear Road, and that people might be trying to steal rides from drivers.

According to Uber’s agreement with OIA, Uber drivers picking up from the airport must use the designated lot to wait for rides. The app uses a “first vehicle in is the first one out” system, which means drivers are placed in a virtual queue, and the first driver to enter the special “geofenced” area is the first to get a ride request.

Detectives determined that some drivers were using multiple phones to bypass that system to try to make more money.

Officers from Orlando Police, Customs and Border Patrol, and Immigration and Customs Enforcement responded to the airport’s designated rideshare lot Friday and made contact with almost two dozen people, they said.

Eight people were trespassed. In addition, nine cell phones were found in nearby bushes and trees.

No arrests were made, and the case was not immigration-related, police said.

No other details were released.

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Uber Shares Skid After $5.2 Billion Q2 Loss, Revenue Miss; Lyft Pulled Lower

Uber Technologies (UBER) shares tumbled in pre-market trading Friday after the world’s biggest ride-hailing group posted a wider-than-expected …

Uber Technologies (UBER) shares tumbled Friday after the world’s biggest ride-hailing group posted a wider-than-expected second quarter loss of $5.24 billion and cautioned that more red ink would follow in the months ahead.

Uber said its loss for the three months ending in June, the second quarterly report as a public company, came in at $4.72 per share, well ahead of the $2.70 tally forecasts by analysts that cover the group. Overall revenues, Uber said, rose 14% from last year to $3.17 billion, but again fell shy of the Street consensus forecast of $3.32 billion.

Looking into 2019, Uber said increased spending and expansion costs will likely mean the group posts a full-year loss of between $3 billion and $3.2 billion, but nonetheless sees gross bookings for the ride-sharing platform, which topped 100 million monthly active users in the second quarter, rising to an estimated range of between $65 billion and $67 billion.

“While you often have to make trade-offs in life, we believe that we can continue to invest aggressively and grow while driving efficiencies from scale by building great tech to improve effectiveness and from good old-fashioned focus on the bottom line,” CEO Dara Khosrowshahi told investors on a conference call late Thursday. “I think you know that the balance between the top and the bottom line is more of an art rather than a science. So I if I told you that we had kind of the scientific formulae that we’re solving for here, we’d be lying to you,”.

“We think that as we look at our marketing spend, our incentive spend, how we can leverage the business going forward, we think that there’s the opportunity to scale our expenses or be more efficient with our incentive spend or be more efficient with our marketing spend really doubled down on less, smaller kind of projects and doubling down on the channels that are really working for us,” he added.

Uber shares were marked 9.63% lower at the opening bell Friday to change hands at $38.83 each, a move that leaves the stock some 13.7% south of its May 10 IPO price of $45 per share.

Uber’s ride-hailing revenues grew just 2% from last year to $2.3 billion, the company said, although the average revenue per rider rose 20%. while Uber Eats, its food-deliver business, saw revenues rise 72% to $595 million.

The group’s overall results, however, offer a sharp contrast to its main rival, Lyft Inc. LYFT, which said yesterday that its loss for the three months ending in June was tabbed at 68 cents per share, notably lower than the $8.37 per share loss it booked last year and 32 cents inside the Street consensus forecast.

Group revenues, as well, impressed analysts’, rising 72% from the same period last year to a forecast-beating $867.3 million. Lyft said revenue per rider rose 22% from last year to $39.77, while the number of overall customers surged 41% to nearly 22 million in its first quarterly report as a public company.

Lyft shares were marked 1.61% lower in pre-market trading Friday, after posting a 3% gain Thursday, to indicate an opening bell price of $61.10 each.

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