Economy

Lyft continues to post losses despite revenue growth

Lyft continues to post losses despite revenue growth”

Bike and scooters have multiplied around big USA cities and ride-hailing services see them as a growth opportunity.

Uber continued to spend heavily on sales and marketing, which includes costly promotions created to attract riders and drivers. Shares had risen earlier in the week after its major United States rival Lyft posted better than expected results.

Uber's share price fell by 12pc in after-hours trading following the news, close to a record low since its May flotation.

The quarterly loss was the largest Uber has ever recorded as results were affected by a $3.9 billion one-time stock-based compensation item stemming from the company's May IPO, as well as a driver appreciation rewards totaling almost $300 million.

On Wednesday, rival Lyft reported figures that were generally welcomed on Wall Street, and there was an expectation that Uber would also post positive numbers.

Revenue growth of 14 per cent, to US$3.1b, was the slowest rate Uber has ever disclosed.

Still, Uber's chief competitor, Khosrowshahi said, was not Lyft but rather vehicle ownership.

Lyft has been investing to grow its share of its more valuable offerings such as premium, business and airport rides, Roberts said.

The company's food delivery business, Uber Eats, more than doubled its number of monthly customers.

Gross bookings, which is the total dollar value of rides and Uber Eats meals and the amount paid by freight shippers, reached $15.76 billion, up 31% - or 37% in constant currency - compared with the same time a year ago. Analysts on average were expecting $15.80 billion. The amount passengers spent on trips rose 20% while the amount Uber kept after paying its drivers increased just 4%.

Chief Executive Officer Dara Khosrowshahi said in a press call the competitive environment is starting to rationalize and it has 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. Lyft is also focused on ridesharing where Uber has broader ambitions.

The company, which has not yet made clear whether it will make a profit, is trying to convince investors that growth will come not only from its ride services, but also from other logistics and food delivery services. 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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