Mo' money, mo' problems... In its first earnings report since this month's IPO, Uber's revenues rose 22%, but its loss doubled to $1B. The happier highlights: Uber Eats (food delivery), Freight, and NeMo (New Mobility aka bikes and scooters). Despite the epic loss, shares rose after the report because investors actually expected it.
That's a lot of billion$... and they're going to new driver promotions. Remember — Lyft, Uber, Doordash, Postmates, and other gig mobility companies are just apps. To grow, they pay drivers and eaters to try them out. A lot. And it's an aggressive arms race to fund all that:
- Lyft just raised $2B in its March IPO.
- DoorDash has raised $1B since February.
- Rappi (the "anything-delivery" of Latin America) also bagged $1B last month.
Uber has a dirty little secret... To become profitable, it'll need to increase revenue or lower cost — And it can get there in just one of three ways (they're not pretty):
- Raise prices.
- Cut promotions and discounts.
- Pay drivers less — Or replace them with self-driving cars (which it's investing in).