Uber stock sinks 6% because it's on pace to lose $8B this year
Losing $543K per hour... Think about that. One time you lost nana's birthday check and you were inconsolable. Uber just told investors everything about its 3rd quarter, but it's hard to not focus on the $1.2B it lost. After losing $5B the previous quarter (that was higher because of one-time IPO costs), Uber's on pace to lose $8B this year. $8 billion.
It's Uber vs. Everybody... Investors piled into Uber for years with the hope it would become like Amazon — an unstoppable giant — but for transportation. In reality though it has enemies. Everywhere:
- Competition: Lyft rose from the ashes of Uber’s scandals. Delivery apps are all over your phone. And self-driving car companies could unleash self-driver not-Uber fleets before Uber.
- Politicians: California's new law could make Uber even more unprofitable by forcing it to pay drivers actual wages and benefits.
- Restaurants: Yup, spots like Bareburger get 20% of their sales from delivery apps — but they're fed up with paying away 15% of those sales as fees to Uber Eats and its delivery rivals. The CEO calls the apps "a necessary evil" that he hopes to be rid of by next year.
Uber prefers you look at its sales growth instead... If you do, you're impressed by rides (revenues up 20%), Eats food delivery (+71%), and Freight (+81%!). Here's the problem: Uber's paying for all that growth. Competition forces it to dish out discounts and promo codes Oprah-style. So it's pledged to change things... in 2 years:
- 2021: That's the magical year when Uber CEO Dara Khosrowshahi says it'll become profitable. Funny — that's also when Lyft said it will stop destroying money and start making it, too.