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Uber Has Biggest Quarterly Loss Yet

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As competition in the ride-sharing world increases, Uber has posted its largest ever quarterly loss. Bumpy Ride Ten years after its founding, Uber went public earlier this year. While its initial public offering was heavily hyped, the actual price of stocks was on the soft side, and it eventually dropped 7.9% below that initial I.P.O. Things haven’t really picked up since, as yesterday it reported a second quarter loss of $5.2 billion, its largest ever since it began disclosing limited financial data in 2017. Also, revenue grew to $3.1 billion, the slowest quarterly growth rate Uber has ever announced. Uber priced its May 10 I.P.O. at $45, but it has since dropped 11%, closing yesterday at $39.80. Dropping Off So what is behind the soft stock? Chief Executive Dara Khosrowshahi laid out a few different reasons. Uber paid its employees $3.9 billion in stock after its I.P.O., a hefty one-time expense. (Start-up companies often use the lure of stock options to appeal to competitive talent.) Also, the company is facing increasing competition from other well-funded ride-sharing services around the world, particularly in India and Latin America, and have had to up their driver incentives accordingly. Eat It Up Khosrowshahi is aware of the growing concerns over whether Uber will ever be profitable, and the company thinks that as long as it keeps expanding, things will eventually be fine. Nelson Chai, Uber’s chief financial officer referred to 2019 as "an investment year," and overall the company remains bullish about the potential for Uber Eats to be a profit source for the company, even as the food-delivery game increasingly looks to be just as crowded as the ride-sharing one. -Michael Tedder Photo: Rodrigo Garrido / REUTERS