Uber reports $1.8bn loss in second quarter

New York: Ride-sharing giant Uber Technologies recorded a loss of $1.8 billion (€1.52 billion) in the second quarter of 2020, after mobility gross bookings declined 73 per cent year-on-year due to the COVID-19 pandemic.
Uber's mobility revenue fell by over two-thirds to $790 million, while total revenue fell by 29 per cent – the steepest decline since the company's initial public offering last May. In large part, the company's fall was due to a drop in revenue from the US, its largest market.
The company said its bottom line was hit by costs related to restructuring and stock-based compensation. The US company laid off about a quarter of its workforce in May and closed and consolidated 45 offices across the world.
Despite the shoddy performance of its core ride-hailing business, Uber has promised investors that it has cash to power on. Nelson Chai, the company's Chief Financial Officer (CFO), said that Uber was taking measures to return to profit by the end of 2021.
Food delivery branch the silver lining
The silver lining in Uber's performance was Uber Eats, its food delivery business, which reported a 103% rise in revenue to $1.2 billion in the second quarter. "As some people stay closer to home, more people are ordering from Uber Eats than ever before," said Dara Khosrowshahi, the chief executive of Uber.
Faced with growing demand, Uber Eats expanded its delivery business to also include groceries and prescription medications in the second quarter of 2020. The firm also acquired food delivery company Postmates, as well as Cornershop, which specializes in delivering groceries.
Lawsuits plaguing the ride-hailing business
The ride-hailing giant is currently plagued by lawsuits challenging the way the company treats its drivers.
On Wednesday, California's Labor Commissioner filed a complaint against Uber. The complaint stated that the ride-hailing firm committed "wage theft" by misclassifying its drivers as independent contractors.
Uber is also fighting a ruling in the UK, which has asked the company to classify its drivers as formal workers. If the company loses its appeal in UK's highest court, it will have to offer its drivers employment protection such as minimum wage and holiday pay.