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Uber posts $1.8B loss in Q2, but deliveries skyrocket

Yahoo Finance’s Dan Howley joins Kristin Myers to discuss how Uber posted a $1.8B quarterly loss.

Video Transcript

KRISTIN MYERS: We are looking at Uber right now. They actually reported almost a $2 million loss in the second quarter. That stock right now is down almost 6%. But they did have a bright spot in their report, and that's delivery. So for more on that, we're joined by our favorite Yahoo Finance techspert, Dan Howley. Hey, Dan.

DAN HOWLEY: Hey, Kristin, that's right. Uber missed $1.8 billion, so they lost that in the quarter. And that's obviously a result of the coronavirus pandemic. People just aren't going out to bars or concerts, restaurants because a lot of them are closed. So these drivers don't have anyone to take anywhere.

And so as a result, gross bookings for the quarter were only, for the ride side, 3.05 billion. That was way lower than analysts were expecting of 3.96 billion, and analysts obviously baking in the idea that the recession-- or the recession caused by the coronavirus was going to hurt the numbers for Uber. The actual rideshare business collapsed 73% year over year because of these lockdowns.

But as you said, the Uber Eats side of the business managed to outperform. So analysts were actually thinking that they would come in with 6.23 billion, but they beat that by $6.96 billion of gross bookings for the Uber Eats side. They saw a jump, meanwhile, of 113% for-- year over year for the quarter.

And that really just speaks to the idea that, look, the services for the ride side was taking a beating, so Uber put a lot of effort into making sure that the Eats side managed to do well during the lockdown. And clearly, that's a good reason for them to have diversified the business enough so that they don't have to rely on one side or the other.

If the ride side collapses, they have the Eats side, and if the Eats side collapses, they have the ride side. I don't know what happens if both sides collapse, but this is something that gives them a leg up versus competitors like Lyft. Lyft only has the ridesharing side of the business. They started getting into some delivery, but nothing near the degree that Uber has with Uber Eats.

And don't forget, Uber is also an international service. So that means that they're able to lean on other regions as they begin to open up where the US may not open up for some time. So I think for Uber, this is kind of a quarter where we knew that they were going to be hurt, but there are some bright spots. And, you know, going forward next week for Lyft, I don't expect to see as many bright spots, simply because, as I said, they are so heavily reliant on the rides business.

KRISTIN MYERS: All right, thanks so much, Dan.