Uber loses $7 billion in three months, after disappointing Wall Street debut

Here’s why you don’t get paired with that Uber car you see on the map

Food delivery Uber Eats grew 72% to $595 million.

Its adjusted net loss, after accounting for the stock compensation, insurance change and other expenses, widened to $197.3 million, from the $176.5 million adjusted net loss it posted during the same quarter previous year.

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

Uber's revenues rose 14% to $3.17bn in the second quarter, below analysts' expectations of $3.3bn and the smallest percentage on record. Analysts surveyed by FactSet expected a loss of $2.03 per share on revenue of $3.31 billion, on average, but those analysts typically exclude one-time expenses such as IPO-related costs.

Uber stock had risen more than 8% and Lyft had gained 3% during the day.

Uber shares dropped 5% in after-hours trading to $40.63.

Uber continued to spend heavily on sales and marketing, which includes costly promotions created to attract riders and drivers.

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Gross bookings, a measure of total value of auto rides, scooter and bicycle trips, food deliveries and other services before payments to drivers, restaurants and other expenses, rose 31% from a year earlier to $15.76 billion. Gross bookings increased 31 percent year-over-year to $15.8 billion.

"Uber has turned into the magical money burning machine".

Chief Executive Officer Dara Khosrowshahi said in a press call the competitive environment was starting to rationalize and had been "progressively improving" since the first quarter.

Revenues are rising in part due to a cooling price war with rival Lyft, as both companies prioritize profitability over growth and spend less on incentives to attract riders to their apps. It raised its revenue outlook.

"While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction", said Nelson Chai, chief financial officer.

More than a third of the loss, or $296.6 million, came from stock-based compensation Lyft paid out after its initial public offering in March. The company completed 1.68bn rides and delivery trips over the quarter, better than the 1.65bn predicted by analysts. But the company also said it laid off 400 members of its global marketing team this summer - about a third of its communications staff. Uber also faced stiff competition in Latin America, where its reported revenue fell by almost a quarter compared with the same period a year ago.

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