Uber First Quarter Reports Show Loss of US$1B

Uber lost over one billion dollars in the first quarter, the company announced Thursday.

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Uber and Lyft Drivers Strike for Better Working Conditions Across the World

Over the last year, the now publicly-owned ride-share company has sought out new avenues within the customer service industry, including food delivery and freighting. However, the high competition and persistent large-scale strikes from drivers demanding a livable wage, have made the road to riches more difficult for Uber.

The quarterly report showed an increase in costs by 35 percent in the first three months of this year, as the company spent heavily in the run-up to its initial public offering (IPO) earlier this month. Gross bookings, a measure of total value of rides before driver costs and other expenses, rose 34 percent from a year ago to US$14.6 billion. Bookings were up 3.4% from the previous quarter, showing the difficulty of recruiting new riders in saturated markets.

However, the billion-dollar-loss is in line with analysts’ expectations and despite the year’s beginning, Wedbush analyst Ygal Arounian told Reuters that the company is likely to accelerate revenue growth.

“We’re still a while away from profitability, but Uber is expecting strong signs of improvement across many of its key metrics and that is an important sign for investors,” he said.

This is good news for drivers who, together with Lyft drivers — one of Uber’s main competitors — demanded higher pay earlier this month.

Protesters in the United States (U.S.), United Kingdom (U.K.), and Australia, among other countries marched as one on May 8, 2019, to ask for better working conditions, a US$28 hourly minimum rate, protections, transparency and support from the billion-dollar companies.

Uber has continued to refuse these demands, stating it can't pay its drivers more mone, yet paid its top five executives US$143 million in total compensation last year alone. The company also argued that drivers are classified as independent contractors, so they technically are not workers for the company, meaning they don’t receive benefits like healthcare, sick pay or other protections.

A study by Gridwise — an app used by ride-share drivers to be more efficient — found that the average hourly driver pay is currently at US$18.65, which means drivers are bringing home an average US$9 per hour after working for 12 to 16 hours a day, according to Washington-based think tank, Economic Policy Institute.