Uber Earnings Strike Ominous Note for Ridesharing Business

Uber posted larger losses and lower revenue than expected in quarterly earnings Thursday, sending stock prices into a tailspin.

Uber declared a loss of $5.24 billion, its largest ever, in its second quarter earnings call Thursday. Uber brought in only $3.17 billion in revenue, indicating slowing growth and failing to meet analysts’ expectations. On Thursday, its stock price fell more than 10% in response. 

Doubts whether the company can turn a profit have dogged it for nearly a decade, but scrutiny has only grown since its IPO in May. The company previously told investors its business depended on replacing drivers entirely with self-driving cars. Uber laid off 400 employees from its marketing division last week. 

Things look better, though still not rosy for rival Lyft. The ridesharing company lost $644 million in the second quarter—a lot, but less than it expected to lose, the company said in its earnings call. Lyft is seeking to balance its business by raising ride prices in several cities, and revenue has risen more than 70% since last year, beating analysts’ expectations.

Like Uber, doubts over Lyft’s ability to become profitable have followed the company since it went public.

Uber and Lyft did not immediately respond to request for comment.