Another quarter passed, and Uber Technologies Inc. is a little further from its goal of showing an adjusted profit by the end of the year.
The second quarter results showed a faster loss before interest, taxes and other expenses than the prior period, a surprising slip that sent the stock down as much as 9.4% on extended trading Wednesday.
The loss was especially unexpected because Uber's main competitor in the U.S. Lyft Inc reported its first adjusted profit on the day before - and ahead of schedule. The divergence highlights how different the two rivals have become.
Lyft benefited from early-day lifting of Covid -19 restrictions in many U.S. cities as vaccines ramped up early in the summer, driving a surge in ride-hailing use. And Uber did, as well, but its sprawling business operates in many more countries and offers many services besides rides. Those aspects were not nearly as profitable.
In the past two years, Uber has sought to expand beyond rides. Transplace spent $2.25 billion on San Francisco-based company last month to acquire logistics provider Transplace. It also purchased grocery and alcohol delivery companies, added package delivery and partnered with GoPuff to ferry convenience store items.
Both Uber and Lyft increased their investment in recruiting drivers who left earlier in the pandemic. Dara Khosrowshahi, CEO of Uber, said the effort worked. The number of people working each month increased by 420,000 from February to July. In the coming months Uber expects to significantly decrease these incentives, unlike Lyft.
Uber said it will increase its adjusted loss to less than $100 million in the third quarter, while decreasing gross bookings. A big caveat is delta variant of the coronavirus. Khosrowshahi reassured analysts and investors on a conference call Wednesday that a fourth-quarter adjusted profit was still in reach.
A resurgence of the virus in the U.S. would be acutely bad for Lyft, though. With the delta variant spreading, Lyft told it would continue to spend on driver bonuses and gave a weaker-than anticipated sales forecast for the third quarter that sent shares down.
The future of Uber would be harder to predict. Khosrowshahi downplayed the threat of the delta variant and said gross bookings actually increased between June and July, with customers in New York City, London and Paris spending 30% more last month than they did in July 2019. 'We have confidence in our ability to survive any scenario just like we have done over the past 500 hours - plus days, he said.
In an interview on Bloomberg TV, Khosrowshahi opposed vaccination mandate for drivers and consumers, placing the burden on governments to make such a rule. He expects an influx of drivers to return in the fall, but acknowledged that the delta variant creates an unpredictable variable, he said on Thursday in the interview : 'As far as delta goes it's difficult to tell what the effect is.