Enlarge /. Passengers load their luggage into their Uber cars at Sydney Airport on August 05, 2020.
The coronavirus pandemic affected Ubers' finances in the second quarter of 2020, the company said on Thursday. Gross bookings for Uber's core hailstorm business decreased 75 percent year over year, from $ 12.2 billion to $ 3 billion.
This was somewhat offset by rapid growth in Uber's delivery business. Delivery bookings more than doubled from $ 3.4 billion to $ 7 billion.
The company lost $ 1.8 billion in the second quarter under GAAP. Uber has ignored one-time fees and lost about $ 1 billion a quarter in recent years.
The earnings outlook for 2020 is disappearing
Before the pandemic, Uber CEO Dara Khosrowshahi was optimistic about the company's financial future. After reporting a $ 1.1 billion loss for the fourth quarter of 2019, Khosrowshahi expected February that Uber would make a profit by the end of 2020.
At that time, Uber's ride was (hardly) profitable. But it was dragged down by large losses from Uber Eats, where Uber spent a lot of money on the quest for growth. Uber expected the ride to become more profitable over time, while delivery losses would decrease as growth slowed. We argued back then that this plan is not as crazy as it may seem.
But then the corona virus hit and Uber was forced to throw these projections out the window. In May, Uber fired 3,700 people to curb increasing losses.
The demand for trips cratered, while the demand for deliveries increased. In his statement on Thursday, Khosrowshahi argued that Uber's product portfolio had "natural protection" because people ordered more to go, even if they restricted going out.
However, Uber says that its ride has made a profit of $ 50 million on an EBITDA basis (earnings before interest, taxes, depreciation and amortization). The problem is that this figure is nowhere near able to make up for losses and overheads – including Uber's supply business and expensive self-driving project.
Fortunately, Uber is in no danger of running out of money. It has cash and short-term investments of nearly $ 8 billion. It could easily burn cash at that rate for another year.
