Uber CEO says business is 'absolutely sustainable' after losing $5 billion in three months

CNN Technology 1 month ago
Uber (UBER) said hat it lost $5.2 billion in the three months ending in June, its largest quarterly loss ever, fueled mostly by $3.9 billion in stock-based compensation expenses related to its public offering during the quarter. CNN's Clare Sebastian reports.

Uber is blowing through billions of dollars, but CEO Dara Khosrowshahi is undeterred.

In an interview with CNN correspondent Christiane Amanpour that will air Wednesday, Khosrowshahi defended Uber's business model, which involves the company investing heavily in promotions to entice customers to its on-demand ride and meal-delivery offerings.

"The model is absolutely sustainable," Khosrowshahi said. "The business, for example, is still growing 30-plus percent on a global basis. And anytime you have a business that has the kind of market size of trillions of dollars in terms of transportation and food and global commerce, it makes sense for a company to invest."

    Uber (UBER) lost $5.2 billion in the three months ending in June, its largest quarterly loss ever. Stock-based compensation related to its initial public offering accounted for $3.9 billion, but the remaining $1.3 billion in losses were still 50% higher than the year before.

    Uber's stock has fallen roughly 30% since going public in May. It raised $8.1 billion in one of the largest public offerings ever.

    Uber faces numerous challenges to its business, including California legislation that would make it more difficult for companies to classify workers as independent contractors instead of employees. The law could increase driver costs for Uber in the state, and trigger similar legislation nationwide. Uber has claimed the bill will not require it to reclassify the drivers, and Khosrowshahi echoed those statements when speaking with Amanpour.

    "The law, of course applies, but we don't think that the law, as it relates to us, would classify our drivers as full-time workers," Khosrowshahi said.

    The law, known as AB-5, would require a business like Uber to prove its contract workers are free from company control, perform work that is outside the usual course of business for the company and have independently established businesses providing similar work in order to be classified as such.

    "We do think that the nature of independent work should change," Khosrowshahi said. "We do believe that they should get health care. We do believe that they should have minimum earnings."

    But making good on that belief of providing better benefits to drivers could run counter to the company's recent efforts to control costs.

      In July, Uber laid off roughly 400 people, about a third of its marketing staff. Earlier this month, it let go 435 people from its product and engineering teams. It's also cut back its electric bike and scooter operations in several cities.

      Amanpour's full interview with Khosrowshahi airs at 1pm Eastern on CNN International and tonight on PBS (check your local listings).


      Source link
      Read also:
      RT › Finance › 1 month ago
      Ride-hailing giant Uber, which has recently reported its largest-ever quarterly loss, has an “absolutely sustainable” business model, according to the company’s CEO, Dara Khosrowshahi. Read Full Article at RT.com
      Business Insider › 2 months ago
      It's a big year for Uber. The first name in ride-hailing had a ton of hype around it for the first half of 2019 thanks to its IPO. And though the $8 billion valuation fell well short of speculations of $100 billion, Uber is still one of the biggest...
      Business Insider › Automobile › 1 month ago
      Uber commenced a third round of layoffs on Monday, TechCrunch's Megan Rose Dickey first reported. Roughly 350 employees in Uber Eats, ATG, and product roles were let go, according to an email from CEO Dara Khosrowshahi published by the news site. Uber...
      Business Insider › Automobile › 2 months ago
      Larry Ellison is far less bullish than Wall Street when it comes to Uber. The Oracle founder trashed Uber's business model at a private San Francisco event this week. "They have nothing," he said of the ride-hailing giant. "No technology. And no...
      Business Insider › Automobile › 1 month ago
      Uber Freight is a freight-brokerage technology for truck drivers and shippers from Uber. The tech giant is investing more and more into Uber Freight. We sat down with Uber Freight head Lior Ron to learn more about the trucking brokerage app, launched...
      Business Insider › Automobile › 1 month ago
      Uber is set to launch Uber Works on Friday, an app that connects gig workers with temporary jobs across a range of industries. Initially, Uber Works will be confined to Chicago, with Uber stating on its website that it "has plans to expand to more...
      Business Insider › Finance › 1 month ago
      Uber's stock has gotten clobbered since the ride-hailing giant went public in May, and now the company looks a bargain, according to Needham analyst Brad Erickson. Erickson argues that at Uber's current valuation, investors are basically getting Uber...
      Business Insider › Automobile › 3 weeks ago
      Uber has launched "Uber Money," a program focused on financial services like payments and banking. Peter Hazelhurt, head of the division, told CNBC that the company would eventually like to offer consumer bank accounts, too. For now, the new unit is...
      Chicago Tribune › Finance › 3 weeks ago
      Convoy is often described as "Uber for trucking," but now the real Uber has set up a competing business. And Convoy risks drawing comparisons to Uber in less flattering ways: drivers grousing about getting squeezed and a business model that has yet to...
      The Week › 1 week ago
      The CEO of Uber is backtracking after suggesting the vicious murder of journalist Jamal Khashoggi was simply a "mistake" on Saudi Arabia's part. Uber CEO Dara Khosrowshahi in an interview with Axios was asked whether the head of the Saudi Arabia...
      Sign In

      Sign in to follow sources and tags you love, and get personalized stories.

      Continue with Google
      OR