Uber lost $5.24 billion in the second quarter of 2019—its largest quarterly loss ever—after making huge stock-based payouts in the months following its initial public offering. The ride-hailing giant says it paid $3.9 billion in stock-based compensation and expenses during the quarter. It also paid $298 million in stock and cash to drivers to show appreciation in connection with its IPO. The loss per share including those expenses totaled $4.72 while revenue jumped 14% to $3.17 billion. Uber continued to spend heavily on sales and marketing, which includes costly promotions designed to attract riders and drivers. Those expenses grew to $1.22 billion, up 71% compared to last year. The cost of price wars and retaining drivers while competing with rivals such as Lyft has been a strain on its ability to turn a profit, the AP reports.
"We could push the company to break even if we wanted to, frankly, but I think what you will see from us is ... lower losses going forward while at the same time we aggressively invest in new growth levers," said Uber CEO Dara Khosrowshahi in a conference call with reporters. "But there's no doubt in my mind that eventually the business will be a break even and profitable business." Khosrowshahi said he expects 2019 to be the company's peak loss year and for the losses to be smaller over the next two years. He said he's confident in the scale of Uber's ridesharing business and its technical capabilities. Uber Technologies Inc.'s shares fell 6% in after-hours trading. Lyft, meanwhile posted revenue of $867.3 million, up 72% from the same time last year, along with a larger-than-expected loss of $644.2 million in the second quarter.
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