Uber Q2 disappoints by wide margin, shares plunge

Lyft gains revenue and riders but still loses a lot of money

The quarterly loss was the largest Uber has ever recorded as results were affected by a $3.9 billion one-time stock-based compensation item stemming from the company's May IPO, as well as a driver appreciation rewards totaling almost $300 million.

Despite the bad news, Uber continues to grow.

Uber and its rivals are spending heavily to expand, but boss Dara Khosrowshahi said that the competitive pressures are easing.

Uber's huge losses have anxious investors and the company's shares have only closed above their initial public offering (IPO) price of $45 twice since its share sale.

Growth continues to slow at Uber Technologies (NYSE: UBER), and the world's leading ridesharing service isn't getting any closer to profitability.

With the revised guidance, the company estimates that 2018 may have been the peak loss year, and expects to lose less money in 2020, said Brian Roberts, chief financial officer, in a conference call with investors.

The loss per share including those expenses totalled $4.72 while revenue jumped 14 per cent to $3.17 billion. Gross bookings increased 31 percent year-over-year to $15.8 billion.

Lyft on Wednesday said pricing had become "more rational", meaning the company should spend less on promotions and incentives to win market share.

Lyft shares were rallying by 8% to $65.22 in after-hours trading.

Uber is working to improve the function of matching riders to drivers and each other, as well as increasing the number of seats filled in each ride, something that will improve profitability.

Lyft, on the other hand, reported better-than-anticipated revenue growth and other positive metrics on Wednesday, despite a US$644 million loss for the quarter.

Uber has consistently said 2019 was expected to be an investment year.

The company is locked in competition with its rival Lyft and is spending on a range of newer businesses including food delivery, Uber Eats, and freight.

The adjusted loss before items including interest, tax, and stock-based compensation more than doubled to $656 million but was better than the company expected, Uber said.

Gross bookings for the year would be $65 billion to $67 billion, it said, in line with Wall Street's target of $65.9 billion.

The company, which has not yet made clear whether it will make a profit, is trying to convince investors that growth will come not only from its ride services, but also from other logistics and food delivery services.

Uber lost $5.24 billion United States in the second quarter after making huge stock-based payouts in the months following its stock market debut.

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