When Dara Khosrowshahi sits down to dinner tonight, he might not be eating his words for change.
In May, Uber’s CEO vowed to be “a cost fanatic across the board.” Less than three months later, his company reported positive cash flow for the first time on Tuesday.
All the best Uber
In many ways, ride-hailing companies have been the poster child for big, shiny Silicon Valley startups that preach disruption and lose money. For its part, Uber, which went public in 2019, posted its first (and so far only) profitable quarter last year, but has lost a whopping $15.6 billion over the past three years (although it was relatively worth $400 million in 2021). ).
May’s change in Khosrowshahi’s tone suggested the company was finally ready to move from chasing size (aka torching cash) to cutting profits after raising more than $25 billion in 33 funding rounds, according to Crunchbase. Is. The company’s financial results for the second quarter confirmed this notion:
- Uber’s record 122 million monthly active users made a record 1.8 billion rides in the April-June quarter, up 24% from a year ago. That brought the company to free cash flow of $382 million on revenue of $8.1 billion in the second quarter, a 105% jump year over year.
- Uber still lost $2.6 billion on a net income basis, but its core business wasn’t a problem — $1.7 billion of those losses could be attributed to investments in other ride-sharing companies, including Aurora and Grab. Uber is already in the process of selling its 7.8% stake in Indian grocery delivery service Zomato in a $373 million block deal, Reuters reported on Tuesday.
Math Wars: Uber’s road to profitability has one notable technical stumbling block: The company has been heavily criticized for the way it calculates adjusted earnings, particularly for its overly liberal, 158-word definition of adjusted EBITDA, which is unusually high. Allows a large number of exclusions. For example, in 2020 it lost $6.7 billion under normal accounting rules, but used its special math to reduce that to $2.7 billion.
Driver: Nearly 5 million people, a record, ride rides or deliver for Uber, up 31% year over year. With inflation and gas prices at some of the highest in recent memory, you can’t blame anyone for seeing the appeal of turning your car into something that makes money rather than bleeds it.