Uber Lost $3 Billion on $3.5 Billion in Revenues. Fake “Profitability” Delayed. Another Quarterly Horror-Show. Markets Eat it Up

This hoped-for fake “profitability” isn’t profitability, but “Adjusted EBITDA,” Uber’s own homemade creature.

By Wolf Richter for WOLF STREET.

Uber – which announced another round of mass-layoffs this week of 3,400 folks or 14% of its staff – reported another classically horrendous quarterly loss this evening.

Revenues rose 14% in the first quarter, ended March 31, to $3.5 billion. But operating expenses, despite cost cuts and the series of layoffs, jumped by 16% to $4.8 billion. And there were “other expenses” of $1.8 billion and interest expenses of $118 million, a tax benefit, and a couple of other things. And the net loss tripled to $2.94 billion.

It’s astounding that investors don’t throw in the towel on a company that is over 10 years old and has many thousands of employees but still loses nearly $3 billion on $3.5 billion in revenues.

In Q1 2019, its last pre-IPO quarter, Uber lost $1 billion on $3.1 billion in revenues, according to its earnings report today. In Q1 2020, it lost $3 billion on $3.5 billion in revenues. This is not a propitious trend.

It has just been a quarterly horror show. In its pre-IPO S-1 filing at the time, Uber disclosed that it had lost $10 billion on its operations over the prior three years. In its IPO quarter, Q2, it had lost another $5.2 billion on $3.2 billion in revenue.

But it’s not going to run out of cash soon. In today’s report, it shows an “accumulated deficit,” which roughly reflects the losses in its lifetime, of $19 billion. But it has raised $31 billion in capital in its lifetime and still has about $9 billion in cash ready at hand to throw into its cash-burn machine.

Q1 revenues were only impacted by the pandemic during the last two weeks of March. The rest of Q1 was pre-pandemic. Q2 will show the brunt of the pandemic on its revenues. Its Rides business is getting “hit hard” now, it said, but Uber is trying to make up for it with its food delivery business Eats.

In Q1, the Rides business, which was stagnating even in pre-pandemic times, generated 3 times the revenues of the Eats business, and over 10 times the revenues of its Freight business. What’s growing are the latter two, but they’re small. But the Rides business, the biggie, is taking the big hit. In other words, Q2 will be a doozie because the costs will still be high, and the revenues will be a lot lower.

But CEO Dara Khosrowshahi threw markets some red meat in form of the vaguest of vague statements to make up for the prospect of many billions more in actual losses: “We are encouraged by the early signs we are seeing in markets that are beginning to open back up.”

He told analysts that Uber is trying to cut fixed costs by $1 billion, including marketing expenses, capital expenditures, and the layoffs announced this week – though the problem is that Uber has been announcing cost cuts and layoffs for a year, and costs just keep rising.

“Reaching profitability as soon as possible remains a strategic priority for us,” he said.

But this “profitability” isn’t profitability. It’s “Adjusted EBITDA,” Uber’s own homemade creature, which, according to Uber, is net income (loss), minus

  1. income (loss) from discontinued operations net of income taxes
  2. net income (loss) attributable to non-controlling interests, net of tax
  3. provision for (benefit from) income taxes
  4. income (loss) from equity method investment, net of tax
  5. interest expense
  6. other income (expense), net
  7. depreciation and amortization
  8. stock-based compensation expense [a BIGGIE]
  9. certain legal, tax, and regulatory reserve changes and settlements
  10. goodwill and asset impairments/loss on sale of assets
  11. acquisition and financing related expenses
  12. restructuring charges
  13. other items not indicative of our ongoing operating performance, including COVID-19 response initiatives related to payments for financial assistance to Drivers personally impacted by COVID-19 and the cost of personal protective equipment distributed to Drivers.

And even under this fanciful BS metric of “Adjusted EBITDA,” Uber still lost $612 million. In other words, those 13 items above that were excluded from its loss amounted to $2.3 billion.

And this fanciful “Adjusted EBITDA profitability” has now been pushed out further, Khosrowshahi said, but not by years, “by a matter of quarters.” It was supposed to happen this year pre-crisis, and it’s now moved into next year, and it’s really easy to move the goal post, as they did today. And even if Uber hits it eventually, it will still only be “Adjusted EBITDA profitability” which will still be a big-fat net loss under GAAP.

Sure, Uber provides a taxi and delivery service that is appreciated by a lot of people. But investors have been subsidizing this service to the tune of $19 billion so far, and they will continue to have to subsidize it because there is no sign that there will ever be real and significant annual profitably under GAAP.

Driven by Lyft – which yesterday reported an equally mind-boggling loss of $400 million on $955 million in revenues, followed by some blah-blah-blah from the executives – the shares of both companies soared today: Lyft +22% and Uber +11%. Afterhours today, upon the quarterly horror show, Uber’s shares jumped another 5%. Good lordie. Who programmed these algos?

Nobody knew what would trigger the next financial crisis, but just about everyone knew it would involve the record pile of corporate debt. And so it happened. Now the Fed fixed it (transcript of my podcast). Read... Nothing’s Fixed: What’s Behind the Corporate Debt Bailout

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  144 comments for “Uber Lost $3 Billion on $3.5 Billion in Revenues. Fake “Profitability” Delayed. Another Quarterly Horror-Show. Markets Eat it Up

  1. A
    May 7, 2020 at 7:25 pm

    The more billions you lose, the more billions FED daddy will give you. Socialized losses, privitized gains.

    • MonkeyBusiness
      May 7, 2020 at 8:02 pm

      That’s why the Republicans really HATE China. We are kinda doing what they are doing, except they are honest enough to call it communism, whereas we cling to this notion of having “capitalism”.

      We keep calling their economic data fake. No doubt they are fake, but at least it’s somewhat reflected in their stock market.

      Here’s my take on Uber though. They did not lay off ANY engineers. My suspicion is that they are going to pivot to do something else.

      • Tim
        May 8, 2020 at 7:17 am

        Uber Airlines…..

        Perhaps they’ll really show those quaint old airlines how losing money is done….

  2. MiTurn
    May 7, 2020 at 7:32 pm

    A nephew who lives in Seattle five weeks ago quit Amazon to work at Uber. Oops.

  3. akiddy111
    May 7, 2020 at 7:36 pm

    Uber’s gut wrenching loss reminds me of Amazon in 1998 when Amazon bled red ink while sporting an outlandish $20 billion market capitalisation.

    I am glad i own Uber stock. I bought it in a fire sale in the middle of March I enjoy these kinds of market share grabbing horror shows.

    Keep the faith. S&P future’s are up. Hopefully the job loss number tomorrow will please the Algos.

    • May 8, 2020 at 12:01 am

      Amazon was a young startup in 1998. Uber has been around for 11 years. Amazon has been profitable for many many years. Uber has no idea how to become profitable. Amazon is overvalued but it knows what it is doing. Uber is just burning cash. Uber won’t have economies of scale until there are self-driving cars, and that’ll take a while longer. You cannot compare the two companies.

      • Willy Winky
        May 8, 2020 at 2:04 am

        If you strip out the government contracts (obtained no doubt by lobbyist bribes)… is Amazon profitable?

        • May 8, 2020 at 12:50 pm

          You should say, “if you strip out AWS… is Amazon profitable?” AWS is a huge money maker, with or without government contracts.

      • MonkeyBusiness
        May 8, 2020 at 2:04 am

        And even with self driving cars, it’s still vulnerable to extinction events like what happens if a faulty software upgrade were to make it to production and cause all those cars to cause fatalities? Kinda like Boeing and their overcompensating software.

        At the end of the day, you can throw gimmicks on top of this POS, but it’s still a taxi company.

        Here’s another prediction: within another year, Uber will buy Lyft. Two people drowning will still drown, but in the meantime they’ll provide an illusion that they’ll float.

      • otishertz
        May 8, 2020 at 2:19 am

        I don’t see self driving cars being feasible, There are too many variables, pitfalls, potholes, work crews, and human error to contend with not even considering road rage.

        Self driving is an all or nothing proposition. Everyone does it or no one.

        At best it’s 20 years off after most people already stopped driving. Maybe long haul truckers could operate autonomously with flashing lights warning of limited reaction time and to stay away.

        I don’t know for sure but I sure don’t see it happening in the physical world any time soon.

        • char
          May 8, 2020 at 4:13 pm

          Highway self driving is already possible. Within 20 years it will be normal that trucks will self drive from the factory to the distribution center. Problem is that cabs are more for travel within the urban environment and from a lot more points to points. IMHO the airport trips are the only cab fares that could be self driving. And not from your home but only those between airport and the big business hotels near a highway offramp.

      • Clete
        May 8, 2020 at 7:06 am

        Wolf, re self-driving cars: wouldn’t the ownership/leasing expense actually be *worse* for Uber than having poor people drive their own cars at their own expense? Still never gonna be legit profitable no matter what; I’m just thinking about a path to “What we call EBITDA.”

      • char
        May 8, 2020 at 4:22 pm

        Why would Uber be good at running a self driving cab company? Their current strong point of running the app would be a tiny moat for a company that runs 200 driverless cabs in one area. And 200 cabs would be a tiny self-driving cab company.

    • The Colorado Kid
      May 8, 2020 at 11:14 am

      Micro dosing whilst programming the algos is a wonderful thing.

    • c1ue
      May 8, 2020 at 3:26 pm

      Amazon had 1 year of losing $1billion.
      Hardly a comparable.

  4. Timothy J McLean
    May 7, 2020 at 7:44 pm

    Wolf, I have given up on buying puts on Uber and other zombie companies. It seems like the more a company loses, the higher their stock price goes.

    • MCH
      May 7, 2020 at 8:27 pm

      There is nothing wrong with buying puts, but perhaps the smarter thing to do is to sell puts, after all, free premiums, no chance it’ll ever go down.

      Look at Tesla, factories are not producing, no problem, valuation still at record levels. I mean who wouldn’t sell puts at $200, because it’ll never get there. You are just collecting free premiums. (until of course, it gets there)

      • noname
        May 7, 2020 at 8:33 pm

        Tesla was the highest-selling vehicle in England last month…….

        • VeryAmused
          May 7, 2020 at 9:45 pm

          UK car sales dropped a whopping 97% last month.

          You are correct, however, Tesla sold a whopping 658 cars in England last month.

          Because the only people that can afford cars in England are rich smug D-bags (I kid, sort of).

        • noname
          May 7, 2020 at 9:55 pm

          I was trolling Wolf. He must be out on the town. I was expecting a heated reply :)

        • intosh
          May 7, 2020 at 11:44 pm

          It’s the few folks who’ve reserved the Model Y and finally took delivery after 12 months of waiting. They can now drive around, going nowhere in particular.

        • Willy Winky
          May 8, 2020 at 2:03 am

          They sold what .. 2 units?

      • otishertz
        May 8, 2020 at 2:24 am

        Selling unicorn puts is about the most dangerous form of speculating I can conceibe.

    • andy
      May 7, 2020 at 8:58 pm

      Why not buy puts in sure thing, like Amazon or Google?

      • Clay
        May 7, 2020 at 10:15 pm

        Because retail FOMO and/or algos are all hiding out in Amazon, Google, Facebook, and Microsoft, and until they feel the need to take some profit, those puts just keep expiring…

        • andy
          May 7, 2020 at 10:23 pm

          Please. Stop gambling. Long story short, it crashes.

    • andy
      May 7, 2020 at 9:02 pm

      What is the plan to make money on Uber puts? I would like to see that.

    • May 8, 2020 at 12:03 am

      Timothy J McLean,

      Glad you finally figured this out 🤣

      This stock market is not for thinking people. It’s for spaghetti-code algos and true believers.

      • Jon
        May 8, 2020 at 12:28 am

        I do deal with stock market a lot but without being reasonable
        The market does not make sense at all and I M not sure for long

        This insanity can go on for long time

        Try to play the system and make some money instead of trying to make sense of it

      • The Colorado Kid
        May 8, 2020 at 11:21 am

        I’m beginning to believe that the truest analogue for Tesla is a 1970’s Guyanese Koolaid session.
        I mean this stuff is like true alternate reality Philip K. Dick shit.

    • May 8, 2020 at 1:59 am

      Some good advice I once read is never short a cult stock.

      Puts are short-term vehicles by nature, and can win if there’s an unexpected loss or simply a routine sell off in a normal chart pattern. A regular short fund will make sure the stock has behaved as expected with bad news in the past. Puts are often tough to make money on, but useful as a hedge to make your investment exposure more market-neutral.

      Forensic short-sellers have to last a long time through horrendous losses before their vocal revelations about a fraud finally take hold. Very few short sellers are successful in just waiting for a overvalued company to come down.

      Cult stocks that are overvalued, even perpetual money-losers, can shock you in their ability to gain in price with terrible financial results because their investors often know that the results will be terrible for a while but they still believe in the company.

      • otishertz
        May 8, 2020 at 2:37 am

        The problem with shorting is you can only gain a max 100% on the way down however upsides can run in multiples.

        The only safe way is if the options written were covered with the underlying already owned where the speculator is looking for income on those already owned shares. If they get called away that is the precalculated loss. That precalculation is what limits risk and allows you to play again.

  5. Gian
    May 7, 2020 at 7:52 pm

    With losses like this, are we certain Uber is not a government entity?

    • Blockhead
      May 7, 2020 at 9:20 pm

      Gian, it’s not a government entity. It is planted by alien invaders and will swallow everything in its path starting with Uber , Lyft, Tesla and everything else including the Fed, Jerome Powell and all others who have pretensions to save the world. At that point, Green shoots will start and Wolf will be put in charge. The foreign invaders thus turn out to be benign.

  6. Cas127
    May 7, 2020 at 7:52 pm

    It would be interesting to know the top 5 VC investors in Uber/Lyft.

    Any the top 5 institutional investors in each of those VCs.

    Probably too much to hope for that second group isn’t public pension fund heavy…

    • Suzie Alcatrez
      May 7, 2020 at 8:39 pm

      I think SoftBank is one of their biggest investors.

      Between Uber and WeWork, I wonder which investment will lose SoftBank the most money?

      • andy
        May 7, 2020 at 10:18 pm

        But didn’t they already sell Uber app to investors for like tens of Billions of dollars? Yeah WeWork was like 3 months late, but they made so much money selling Alibaba website, like gazillion yens.

    • Rcohn
      May 7, 2020 at 9:58 pm

      Sure money!
      Sell short a portfolio of vastly overpriced tech stocks

      • char
        May 8, 2020 at 5:02 pm

        It is not only tech stocks that are overpriced. It is everything. Better to bet with a short sell on a company that wont stumble into a AWS

      • ShineOla
        May 9, 2020 at 6:11 pm

        They had surge pricing for years and in Q1, ya know it’s that pesky 2x , 3x and higher busy time fare pricing, they have a message that reads, “ it’s busy and fares are higher “, they collect up to 80% due to new contracts drivers were forced to sign, guess what… it’s all gone, no more concerts, sporting events, busy airports, conventions, you name it, it’s over

    • MC01
      May 8, 2020 at 2:41 am

      Here are the top five Uber shareholders according to the most recent SEC filings available:

      Softbank 12.8%
      Benchmark Capital Partners 8.5%
      Travis Kalanick 6.7%
      Garrett Camp 4.6%
      Public Investment Fund of Saudi Arabia: 4.3%

      Honorable mention goes to Alphabet (Google) with 4.2%.

      If you consider the Public Investment Fund is supposed to help pay for everything in Saudi Arabia, from government pensions to the obscene subsidies paid to steel mills, the first group is in troubles already.

      • Cas127
        May 8, 2020 at 9:31 am


        Thanks for doing the work.

        Not going to cry too much about insiders taking the hit – they created the goofy/doomed unit economics of the co.

        Do wonder if Softbank has fair chunk of US public pension money in addition to great galloping gulps of petro-dollar money (which was looking for better yields than oil…which I suppose in perverse ways it did…)

        • MC01
          May 8, 2020 at 3:25 pm

          If you mean the Vision Fund two thirds of the capital come from just two institutional investors: the Public Investment Fund of Saudi Arabia and the Mubadala Investment Company of Abu Dhabi.
          The only “Western style” pension fund that seems to have made a meaningful investment in the Vision Fund is the Canada Pension Plan Investment Board, but others may have joined in with smaller investments.

      • char
        May 8, 2020 at 5:05 pm

        I think Google got paid back in ad spending and didn’t sell Kalanick his shares.

  7. Tom Stone
    May 7, 2020 at 8:03 pm

    And there is still no shortage of airplane glue.

    • polecat
      May 7, 2020 at 8:57 pm

      Only if you’re BOEING!

    • Cas127
      May 8, 2020 at 9:35 am

      Yes, Amazon will sell/deliver unto you the spray paint needed to huff in order to justify Amazon’s pe ratio.

      It is the perfect self-sealing business model.

  8. Brant Lee
    May 7, 2020 at 8:06 pm

    Whew. Wolf is putting em out as fast as I can read them. A case of beer (or 3) for you next time I go through SF. Thanks for the good work.

  9. Bobby Dents
    May 7, 2020 at 8:11 pm

    I would ignore short term stock moves. Those always come with efforts to boost profits. Then you sell it and make money.

    • Happy1
      May 7, 2020 at 11:37 pm

      Agreed. That isn’t investing, it’s gambling.

      I don’t know who the morons are who own this stock and others like it. It won’t end well.

  10. Old-school
    May 7, 2020 at 8:18 pm

    I worked for a young company on my second job and watched it grow and eventually get bought out. When the president retired he said with a little bit of pride that over about 20 years he only had one year that we weren’t profitable.

    That was from around 1980 to around 2000. Money was dear to us. New projects had a hurdle rate of 100% and they were available because we were starting with nearly nothing but cheap labor. Used to have to use buckets in the office when it rained. It was mostly fun, because there was no written policies and procedures. Just use your best judgement.

    • MiTurn
      May 7, 2020 at 8:25 pm

      What you described sounds like an internet startup (well, six years now) where a relative works at. He loves it! He was employee number 20 and now they’re becoming a mid-sized company. So, sounds like this sort of thing is still around.

    • Phoenix_Ikki
      May 7, 2020 at 9:24 pm

      I give up, in this what’s up is down kind of world, its a fool’s errand to try to make sense of it all. A company that loss tons of money with poor balance sheets like Uber, airbnb, Beyond meat (which can’t even keep track of their inventory at their copackers) and king of all Tesla are SM rockstar flying high in times like this. Can’t say enough WTF really.

      Aftermarket is now up 200pts, looks like another bull rally again tomorrow with the horrible unemployment numbers as cherry on top.

      • May 8, 2020 at 12:23 am

        Jobs report is coming out in the morning. If the unemployment rate is a catastrophic 20% or more, the DOW will surge 1,000 points :-]

        • MCH
          May 8, 2020 at 2:00 am


          Stop looking at the past… Wall Street is looking ahead, the market is a forecasting machine, not a history book, and it is accurately forecasting the future.

          All this unemployment and temporary hiccup in the market has already been factored in during the March crash. The market reacted appropriately, and shed the points, then looked further ahead and saw unicorn pooping out rainbows and sunshine everywhere, so it is forecasting a good time for everyone.

          Think positive it’s saying. It won’t drop again until you… Wolf Richter, personally decides to write another article shorting the market again. Nothing but CAVU ahead unless you dampen the mood.


        • May 8, 2020 at 9:20 am

          This stock market action relates to the dollar. NYSE is a global market.

      • Clete
        May 8, 2020 at 7:10 am

        “Beyond meat (which can’t even keep track of their inventory at their copackers)”

        So you’re saying they need more bean counters?

        • Tim
          May 8, 2020 at 7:32 am

          Haha- very good!

        • Phoenix_Ikki
          May 8, 2020 at 10:52 am

          or they need some people that are more competent to control their inventory instead of hiring left overs from Amazon and Tesla.

      • char
        May 8, 2020 at 5:16 pm

        If i look at the local supermarkets that it is obvious that the fake meat market is booming. Problem with high growth markets is that they are cash flow negative and high growth costs by it self a lot of money

  11. MCH
    May 7, 2020 at 8:24 pm

    I am waiting for the inevitable Uber or Lyft / Tesla tie up. It would put the stock in the trillion dollar market cap category. Mobility, baby, it’s the future. I mean it’s only logical, the future of mobility and environmental friendliness all rolled up in one.

    Imagein: “A fleet of robotic Teslas to provide you with affordable rides in style that is eco friendly and with the benefits of unparalleled safety thanks to autopilot, and all on demand.”

    Hey, that’s actually pretty good, may be I should apply for a position in the PR department.

    • CRV
      May 8, 2020 at 3:49 am

      With COVID-19, and many other bad critters flying around, who would be comfortable in a car without a driver? Not knowing if something discusting has been done in the vehicle, makes me unwilling to use such a service. At least with a driver there is some check on hygene. That’s why i don’t like public transport anyway. I rather sit in my own car, knowing what the bloke before me has done in it. ;-)

  12. Paul
    May 7, 2020 at 8:25 pm

    Tulips for sale.

    • Stephen C.
      May 8, 2020 at 8:34 am

      Well, what you do is put a chip in a Tulip and call it a disruptive, self-growing Tulip, and you’ve got another unicorn to pitch to investors.

  13. No1
    May 7, 2020 at 8:26 pm

    I have noticed Uber has been trying to cut costs because it has stopped sending me so many free vouchers to buy meals with on Uber Eats. I have never paid more than half the bill for anything I’ve bought. Thanks investors!

    • sierra7
      May 8, 2020 at 3:09 pm

      Yeah, but you really don’t know what’s in those meals now do you…….LOL!!!!

  14. MiTurn
    May 7, 2020 at 8:28 pm

    Could you imagine the ways people will leverage this? A whole new cottage industry. Assuming there aren’t cameras in these autopilot Teslas.

  15. LeClerc
    May 7, 2020 at 8:29 pm

    Uber had an operating loss of around 600 million.

    With 9 billion in cash, they can easily absorb the loss. Meanwhile, there are around 30000 employees who have good jobs, and everyone gets to use their services.

    One day they might be profitable. Until then, onward!

    • May 8, 2020 at 12:14 am

      “operating loss of around 600 million” how Uber defines it. A net loss of $3 billion how GAAP defines it. Interest, depreciation of equipment, settlements of lawsuits, penalties, etc. are REAL expenses. Uber just doesn’t count them. And it hopes that you swallow its fake non-GAAP numbers lock, stock, and barrel.

      • fajensen
        May 8, 2020 at 6:24 am

        Doesn’t matter: The point of Uber is to flare off excess money on useless and unproductive activities so that the money doesn’t enter the non-asset economy and causes inflation!

        Stupid unicorns are simply pressure relief devices for the FED pipelines that are feeding the 0.1%’ers with their nutrients.

        The bigger the flaring, the more money is being pumped, and the better this is for ‘the economy’. Well, for ‘the economy’ that matters, so stocks naturally goes up in proportion to the size of the flaring. Easy!

      • LeClerc
        May 8, 2020 at 6:07 pm

        Uber’s preferred numbers are garbage, but GAAP doesn’t put chow mein on your porch.

        Don’t trade their securities, but, who doesn’t like fancy boba drinks delivered from seven miles away?

    • Willy Winky
      May 8, 2020 at 4:28 am

      ‘one day they might be profitable’

      Sounds like an excerpt from a business plan created for a grade 9 class project.

      That got an ‘F’ grade

  16. roddy6667
    May 7, 2020 at 8:46 pm

    In China, we had Uber and Didi Chuxing battling for market share. It’s a huge business here. Neither had ever made a penny of profit. Eventually Didi bought out Uber. Wow!, did Uber screw Didi, or what?

    Oh, wait. Didi paid with Didi stock, not cash. Who screwed whom?

    • Clay
      May 7, 2020 at 10:20 pm

      Same thing out in Southeast Asia with Grab and Uber. Uber exited, selling its business there to Grab, before regulators could even protest.

      One of the amazingly boneheaded things that Uber did in Singapore was to set up a subsidiary to buy $1 billion worth of cars (that might be in Singapore dollars, so US$ 700 million) just to put more drivers on the road.

      Cars in Singapore are expensive due to taxes and permits but that’s just more cash incineration…

    • intosh
      May 8, 2020 at 12:00 am

      When your business model of losing cash hand over fist to grab market share from the conventional players, another competitor with that same business model would accelerate your demise (and that of the said competitor) at light speed.

      • apm
        May 8, 2020 at 12:38 am

        What happened to anti-trust/anti-dumping enforcement?! Was it not once illegal to make huge losses to destroy the competition and acquire marketshare by selling under cost?

        The whole tech/startup industry seems to be built on “disrupting” existing industries by selling products for free/cheap by burning up billions of $ and circumventing government regulations to acquire as much market share. And then once you have a monopoly trying to figure out a way how to monetize the monopoly.

        How is this legal?!?

        • intosh
          May 8, 2020 at 11:36 am

          Illegal? You and I, who have heard of anti-trust and anti-dumping, live in an era long gone.

          What you described in a model backed by enormous fortunes from around the world. See SoftBank (which is itself essentially backed by BoJ and the Saudi’s MBS).

          Heck, in this upside-down reality, a man can escape justice even after having pleaded guilty.

        • sierra7
          May 8, 2020 at 3:14 pm

          In “my day” when purchasing for a major retail grocery chain I had to sign a “consent decree” that could have canned me if I had “merchandiser” any product “below cost”. (Of course there were internal financial wizardry set up to maneuver around this but that’s another story).
          Today there doesn’t seem to be any “rules” left at all…….

    • MC01
      May 8, 2020 at 6:26 am

      Wasn’t DiDi founded by a protégé of Jack Ma’s who had been tasked with setting up Alipay?
      DiDi has never had a problem pulling in a ton of money from State-owned companies like China Life Insurance or companies run by Party members like Tencent and Alibaba itself: it’s clearly an outfit that doesn’t care about money because turning a profit was never its intended scope.
      I strongly suspect DiDi is just one of the many “incubators” the Chinese government helped set up to make a great leap forward in various technologies: ride sharing is just a means to an end.

  17. DR DOOM
    May 7, 2020 at 8:48 pm

    Uber and Bubba Gump Shrimp are my two favorite companies .

  18. Cobalt Programmer
    May 7, 2020 at 9:15 pm

    In DC area, Mayor announced that delivery fees for restaurants are capped at a low, like 15% which was higher before. Now, all restaurants are open but either carryout or delivery. I don’t know, if either driver, company or restaurants take the cut. Believe it or not, as the metro trains and buses are now reduced now, these delivery were running food for the people.

  19. Augusto
    May 7, 2020 at 9:18 pm

    How long does “fake” work: fake numbers, fake narrative, fake predictions. Seems to be forever. I guess I still believe that reality will win out…at some point.

    • Happy1
      May 7, 2020 at 11:22 pm

      What can’t continue forever won’t

  20. Javert Chip
    May 7, 2020 at 9:41 pm


    The 2nd paragraph quotes 1Q20 revenue of $3.5, and expense as $4.8, for what appears to be an arithmetic loss of $1.3B. The reported loss is $2.94B – where’d the additional loss of $1.6b come from?

    …be gentle with your explanation, I’m an old guy…

    • May 8, 2020 at 12:30 am

      Yes, thanks. Sloppy writing. Those were operating expenses. There were “other expenses” of $1.8 billion and interest expenses of $118 million, a tax benefit, and a couple of other minor things.

  21. VeryAmused
    May 7, 2020 at 10:22 pm

    I am ranting here and some of this is a bit melodramatic, but from what I can tell we have…

    The fastest stock market drop in history followed by the fastest rebound in history.

    The largest growth in unemployment in the shortest amount of time in history.

    The largest debt-to-GDP in history.

    Rents not being paid.

    Mortgages not being paid.

    Oil crashing.

    Natural gas crashing.

    Car sales crashing.

    Home sales crashing.

    Food insecurity rising.

    Planes empty.

    Hotels empty.

    Restaurants empty.

    Schools empty.

    Shops empty.

    Stadiums empty.

    Deadly virus on the prowl.

    And the one that really blows my mind…Amazon is taking more than two days to deliver my stuff.

    This is holy bat shit @#$% crazy.

    • Happy1
      May 7, 2020 at 11:27 pm

      I’m not a fan of what the Fed hath wrought with this artificial rebound, but it is possible that the risk to economy in this situation is overstated. We will see in a few months if people can continue to hand wash and avoid contact but otherwise work and get back to near normal. Travel and entertainment will be a problem, but large sectors of the economy might not be hindered that much.

      • VeryAmused
        May 8, 2020 at 12:55 am

        The economy has been deteriorating since October 2018. The virus just set the debt tinder pile ablaze.

        Lucky for us the fed has a extinguisher filled with more debt.

        Phew, that was a close one.

    • Stuart
      May 7, 2020 at 11:43 pm

      Get used to it. They went to far this time. With an imbecilic President, a Speaker of the House who flaunts $12,000 refrigerators and a Senate Majority Leader whose contempt for those who cannot pay the rent is palpable, all I can say is
      “ where is my pitchfork “ ?

    • intosh
      May 7, 2020 at 11:49 pm

      How can you forget retail?

      Neiman Marcus and J.Crew filed recently. More to come undoubtedly.

      • Javert Chip
        May 8, 2020 at 3:12 pm

        More to go undoubtedly.

        There, I fixed it for you.

  22. J.M.Keynes
    May 7, 2020 at 10:24 pm

    – They should have raised the prices they charge for their rides. Then perhaps they could make a profit.

  23. Phoenix_Ikki
    May 7, 2020 at 10:38 pm

    Yeah at some point but then again look at whos in charge, his whole life made up of fairness yet he is still able to get away 70+ yrs later..so that some point can be almost like forever..

    • Phoenix_Ikki
      May 7, 2020 at 10:44 pm

      Damn auto spell correctiom, meant fakeness not fairness..that guy is about as opposite as fairness can get..

      • roddy6667
        May 8, 2020 at 1:41 am

        Whoever invented autocorrect can burn in hello.

        • SwissBrit
          May 8, 2020 at 7:08 am


          I’m stealing that!

        • Saltcreep
          May 8, 2020 at 5:33 pm

          Yeah, I’m appropriating that one too. Excellent one, roddy!

  24. timbers
    May 7, 2020 at 11:20 pm

    So let me get this straight:

    1). Instead of funding 87% of American that use Public Water & Sewer.

    2). Instead of funding Government workers in both Red & Blue States where the government promised retirement benefits for working folks.

    3). Instead of funding State and Local Police protection.

    4). Instead of funding State and Local Public Education and Schools.

    5). Instead of funding MedicareForAll that would save hundreds of thousand of lives in America each and every year and save the government and Americans $Trillions$ of dollars.

    Instead of these things that would actually generate jobs and benefit Americans…Jerome Powell’s legacy will that he gave billions to Junkety Junk from here to Timbuck Two, to Uber and Lyft, to greedy anti-social Buy Back Corporations, the criminal man slaughtering CEO’s at Boeing, and to Blackstone so they privatize corporatize commercialize profitize Public Education, privatize Public Water & Sewer, privatize Public Police and Fire Departments, and let retiaries scavange for food in dumpsters.

    Thanks Jerome. Thanks Don. Thanks Nancy.

    • Happy1
      May 7, 2020 at 11:34 pm

      Many correct things here. I hate most of the stimulus. Although PPP and the individual payments are at least aimed at or mostly at the people most in need.

      I chose to live in a state that didn’t make unkeepable outrageously above market promises to government retirees. Why should I be paying for IL and NJ to prop up their public pensions. If we are going to have a budget busting free for all like this, and I think we should not, states that have been prudent should be at the top of the list.

    • Stuart
      May 7, 2020 at 11:47 pm

      Welcome to “ Third World U$A “.

    • MD
      May 8, 2020 at 3:10 am

      You forgot a total of 36 years of war combined in Afghanistan and Iraq, both achieving absolutely nothing, plus the myriad other ‘scuffles’ the USA has been involved in, covert and overt, basically since WWII.

      Much more important than internal infrastructure investment, universal quality healthcare (“COMMUNISM!” they’ve all been trained to scream), welfare and education provision for a stable and progressive society.


      Instead, just wave that flag as that F22 flies overhead and revel in the fact that, whilst it’s bankrupted you long ago, you can kick everyone’s a55. And that’s the most important thing, and the true measure of patriotism.

    • Xabier
      May 8, 2020 at 8:36 am

      Pensions, dear boy, are history: get over it or go mad….

      Now, I have a cigar to smoke.

  25. May 7, 2020 at 11:28 pm

    Why does Uber need to spend anything on marketing and promotions and why do they have so many workers?

    If they cut out of the markets that are not profitable, they can require cities to pay them to re-enter the market. Give someone else the burden of unprofitability.

    Each ride should be pure profit. The operating expenses should be very low per ride.

    It is crazy that a profit can’t be made in established markets where there are already many drivers/riders.

    • Javert Chip
      May 8, 2020 at 3:20 pm

      So go out & invent “Jeremy Uber” and get filthy rich…

      …or maybe it’s not as easy as it looks.

      I’m betting on “not as easy as it looks”.

      • Sit23
        May 9, 2020 at 1:51 am

        The reason Uber is unprofitable is because if they priced profitably the “old” taxis with their business model which has been around for a hundred years would run them out of town. Are there some people still around who do not know this? Uber was set up to enrich two people. The job has been done. Everything happening to Uber since then has been it’s death throes. Except that a lot of people make really good commissions doing financial stuff involving other people’s money and Uber shares, so Uber’s actual death will still be some time off.

        • Stevie
          May 9, 2020 at 3:28 pm

          Exactly. A blogger in the taxi business gave a detailed explanation of why Uber, Lyft, et al can never be profitable at current fares, because running a transportation service is damned expensive. Their predatory attempt to externalize costs onto clueless drivers (not an insult, just an observation of their unwitting exploitation) is a defining feature of much of the so-called sharing economy.

    • char
      May 8, 2020 at 5:46 pm

      Develop your app/popularity in a market that Uber left because of unprofitability. Make it great and than go to cities were Uber is profitable. Uber needs those unprofitable cities as moat. And there is the question if they are profitable anywhere.

  26. Clockwork Orange
    May 7, 2020 at 11:37 pm

    Sounds like Uber has about three more quarters to live and should be out of cash by EOY.

    • char
      May 8, 2020 at 5:49 pm

      Normally that would be true but with Covid19 they can fire almost everybody and still claim to be alive. Besides taxi service is something that will go through a very meager time.

  27. Beardawg
    May 8, 2020 at 12:33 am

    As long as Unicorns can borrow from the greater fool, the public will receive competitive pricing for whatever Unicorns provide. Consumer wins until Unicorn’s horn withers. Then, Jerome covers the cost for a new horn….then we all pay market price for the Unicorn’s product / service. Buy the Unicorn’s product / service – you don’t need to buy the stock – it is still a net consumer victory in the age of Unicorn farms.

  28. Raymond Rogers
    May 8, 2020 at 1:10 am

    Am I missing something? If they have raised 31B and spent 19B shouldn’t they have 12B on hand?

    Am I calculating this according to GAAP standards?

    • MD
      May 8, 2020 at 3:04 am

      Your mistake is probably in applying logic.

      That left the building quite a long time ago when it comes to the financial markets. It’s through-the-looking glass stuff wherein all kinds of sophistry are applied to mask the fact a lot of businesses are debt-laden, profitless scams..!

    • May 8, 2020 at 12:42 pm

      Yes, it’s not that easy. If they invest $1 billion cash in buying another company, of if they invest $100 million in an office building, it’s considered an investment not an expense. So the cash is gone, but it wouldn’t be part of their losses or “deficit.”

    • Henri
      May 11, 2020 at 7:38 pm

      Capital vs Revenue expenditure

      They both use up cash

      Capital expenditure sits on the balance sheet and is depreciated/amortised over it’s useful life

      Revenue expenditure goes straight to the profit/loss

      Capital expenditure generates cash (plant & machinery, software, investment in a subsidiary)

      Revenue expenditure is dead money (advertising, wages, admin expenses)

      Trading losses only take into account revenue expenditure. The idea being that the investments in capital assets aren’t completely worthless, but that’s up for debate lol

  29. Willy Winky
    May 8, 2020 at 2:07 am


    Stop looking at the past… Wall Street is looking ahead, the market is a forecasting machine, not a history book, and it is accurately forecasting the future.

    All this unemployment and temporary hiccup in the market has already been factored in during the March crash. The market reacted appropriately, and shed the points, then looked further ahead and saw unicorn pooping out rainbows and sunshine everywhere, so it is forecasting a good time for everyone.

    Think positive it’s saying. It won’t drop again until you… Wolf Richter, personally decides to write another article shorting the market again. Nothing but CAVU ahead unless you dampen the mood.

    I had to laugh when I read that — it was so good I want to repost it.

    Are you long the market? It’s a great time to buy if you believe what youappear to believe.

    • Javert Chip
      May 8, 2020 at 4:12 pm

      Willy Winky

      You might not like this, and I apologize advance; it’s all Yogi Berra’s fault, and I’ll explain that in a minute:

      Markets do not, never have, and cannot forecast the future. If they could, everybody would know what’s going to happen, and we’d all be doing the same “correct” thing.

      Depending on how you define “right now” (my definition: the last few minutes + things with a high probability of happening, like the unemployment announcement), what markets actually do is an amazing job of absorbing every changing current knowledge, lies, rumors, facts, emotions, sentiment, world events, the weather and billions of daily arms-length independent buying decisions, and integrating all that objective & subjective stuff into a “market price”.

      The astute observer will notice that (most) US markets are open 6.5 hours a business day, or 23,400 seconds. The average listed stock’s price probably changes every 10 seconds – that’s 2,340 revisions to “market price” for a single stock in a single day, or 608,400 revisions in a single year.

      The market’s best guess for the future is the current “market price”, which is good for 10 seconds …or less. At no point in time is the market actually forecasting the future.

      Yogi Berra’s said “predictions are difficult, especially about the future”, and with that prediction, he was 100% accurate.

      • Willy Winky
        May 9, 2020 at 12:00 am

        I was re-posting someone else’s comment….the mocking it

      • Sit23
        May 9, 2020 at 2:17 am

        Wrong. One can be given what will happen in the future. Then one rushes out of one’s senate meeting where the confidential embargoed information was given, and sells one’s shares before one gets Burrned.

        • Javert Chip
          May 9, 2020 at 1:46 pm


          I stand (sit?) corrected.

  30. Philip
    May 8, 2020 at 6:31 am

    “We are encouraged by the early signs we are seeing in markets that are beginning to open back up.” Sure. Really early signs. Somebody saw two guys getting into a car somewhere.

    • MC01
      May 8, 2020 at 8:28 am

      I think the folks at Uber saw that in China car sales are starting to recover, domestic flights keep on increasing, Disneyland Shanghai will re-open on Monday… and they completely forgot they sold their China operations to DiDi Chuxing a while back and have apparently already burned through all that cash.
      I wouldn’t be too surprised if Uber executives started adjusting their non-GAAP figures to show how things would theoretically be had they not sold their China operations: “Look! The recovery is already here! Rides in Shenzhen are up 81% month on month!”

    • Xabier
      May 8, 2020 at 8:34 am

      The great problem, conceptually, is that the talk now is of ‘re-opening’ of markets and sectors.

      This is quite false.

      Many were quite simply smashed up suddenly by government action.

      Some will be impossible to repair, and many of those not the least significant.

      It’s not a question of merely turning the ‘CLOSED’ sign in the window to ‘OPEN’.

      • MC01
        May 8, 2020 at 2:30 pm

        Those same governments appear to have started noticing their actions have consequences.

        Today the Lufthansa Group announced, completely out of the blue, they will resume flights “to 106 destinations” in June already. These destinations will include Palma de Mallorca and several other vacation hotspots. I doubt Lufthansa would commit to pull 150 aircraft out of storage and recalling their crews on such short notice had they not received very precise guarantees from all governments involved.
        On Wednesday the Italian Minister of Healthcare in person announced “several categories of retailers” would be allowed to re-open on May 18 already instead of June 1 “if they are able to meet our safety guidelines”. Again, this was totally unexpected.

        This evening I stopped at nursery to pick up a bag of fertilizer and they were pretty much packed. Yes, everybody was wearing facemasks and gloves but it’s kinda hard to believe this is one of the worst hit areas in the world and that about a month ago there was literally nobody on the streets, not even police patrols.

        Funny or scary thing is that given the “background noise” of new (and overwhelmingly mild) cases people are sure to stay on the edge for a while and keep on wearing facemasks and perhaps even washing their hands: this should make the much feared second wave in the Fall either part of this background noise or not much worse than a seasonal flu.

      • char
        May 8, 2020 at 6:01 pm

        The sectors were not smashed up by government action but by the self preservation instinct of the general public. And they were right.

        • MC01
          May 9, 2020 at 1:35 am

          I don’t know, but I don’t remember open and empty stores a month or so ago. When hardware stores re-opened on April 6 the lines to get in were simply astonishing: did everybody just need screwdrivers and paint all of a sudden?

        • char
          May 9, 2020 at 8:40 am

          Hardware store are always busy during times that the general public is free and the general public has now much more free time. (not working or working from home so no commute and you can’t go to bars or movie theaters)

          And they are the only “entertainment” that is open.

          You can look at Sweden how busy restaurants are without a lock down.

    • WT Frogg
      May 8, 2020 at 1:04 pm

      Yes !! Those early signs were the “green shoots” . Unfortunately those green shoots were just crabgrass growing up around the shipping bays of shuttered businesses.

  31. andy
    May 8, 2020 at 8:07 am

    Net loss of $3bn for the quarter and $9bn remaining cash so 2-3 qtrs left before they need more cash.

    Who they gonna call? – The Fed?

  32. Jgkconfused
    May 8, 2020 at 9:34 am

    Now do CVNA

  33. dr spock
    May 8, 2020 at 10:07 am

    All these comments on the fed rewarding multi-national corporations and trickling on we, the people reminds me of the same stories during the “great recession”, yet nobody stops the fed. I wonder when the people will finally say, enough is enough and put them in orange jump suits.

  34. PGibby
    May 8, 2020 at 11:09 am

    Has anyone done the math – I’m curious what ride percentage price increase would be required for Uber to become profitable?
    Or is the expectation that costs will drop enough to gain profitability as the company matures.

    • May 8, 2020 at 2:14 pm

      The problem with this calculus is the side effect: higher rates mean fewer people are using the service. So if Uber raises its rates, it may actually end up with fewer dollars in revenues.

      • Tim
        May 8, 2020 at 5:22 pm

        Well, what does it matter?

        Their business model is really based on revenue anyhows, no?

      • Tim
        May 8, 2020 at 5:23 pm

        Is not based on revenue, I mean

      • PGibby
        May 12, 2020 at 7:31 am

        Thanks, good point. It doesn’t bode well for their business model if demand is too elastic. I guess they’ll need to work harder on the cost side.

    • Javert Chip
      May 8, 2020 at 4:31 pm


      I’ll take a 50,000 ft SWAG at your question (for simplicity, I’m ignoring Wolf’s highly relevant statement):

      o Uber’s most recent quarter reported $3.5B in revenue and a $3B loss; if Uber doubled revenue (2 x $3.5B = $7B), they’d have a pre-tax profit ($7B – $6.5B) of $500m; after 35% state & fed taxes, that’s a GAAP profit of $325M.

      REMEMBER, UBER ISN’T SPACEX (or anything close to a tech company) – IT’S A FRIGGIN MONOPOLISTIC TAXI COMPANY!

      • Javert Chip
        May 8, 2020 at 4:42 pm

        By doubling revenue, I meant doubling price of a ride,

      • Sit23
        May 9, 2020 at 2:23 am

        Uber has no monopolies. That is it’s problem. My taxi company has a policy of all drivers doing Uber as well. 70% our own work, 30% Uber roughly. And we promote our company for all future rides with all our clients. As a result the real Uber drivers can’t survive in our city.

        • Javert Chip
          May 9, 2020 at 2:12 pm


          I more or less agree UBER doesn’t have a monopoly; HOWEVER, their business model only works if they do.

          I would normally say that sooner or later, smarty-pants millennial & rich guy investors will tire of the losses, but with 10-years of UBER losses totaling $20B, maybe not yet.

          Same Softbank business model for UberEats, WeWork and others in their “portfolio: grow fast, kill off competitors, enjoy your monopoly while it lasts.

          In the mean time, watching & reading about Son & company throw hundreds of millions at concepts like dog-walking & pizza-making to demonstrate they are tech-driven and scaleable is quite enjoyable.

  35. char
    May 8, 2020 at 6:12 pm

    I have an issue in what they exclude. number 13 includes driver PPE. This should definitely be included in the costs for their made up profit accounting. PPE should be included even if you use the idea behind their fake profit model.

    • Javert Chip
      May 8, 2020 at 10:11 pm


      Here’s a punchline for the UBER business model:

      Around the time of the UBER IPO, as a group, their top-5 executives were paid $6.8M in salaries and $140M in bonuses for the fantastic(?) job they’ve done managing a company that has, thus far, lost about $20B.

      Just saying, if I were paid that kind of money, I promise I could lose even more money …and faster:

      If I were hired, my marketing plan would let customers ride for free; in addition, we’d (UBER) also pay the customer a cash bonus of $5 for each ride. With my fantastic marketing plan, it wouldn’t take long before no customer would ride in any competitor’s car! When we have a complete monopoly, we may have to slightly adjust our rates.

    • Javert Chip
      May 8, 2020 at 10:15 pm


      Here’s a punchline for the UBER business model:

      Around the time of the UBER IPO, as a group, their top-5 executives were paid $6.8M in salaries and $140M in bonuses for the fantastic(?) job they’ve done managing a company that has, thus far, lost about $20B.

      Just saying, if I were paid that kind of money, I promise I could lose even more money …and faster:

      If I were hired, my marketing plan would let customers ride for free; in addition, we’d (UBER) also pay the customer a cash bonus of $5 for each ride. With my fantastic marketing plan, it wouldn’t take long before no customer would ride in any competitor’s car! When we have a complete monopoly, we’ll have to slightly adjust our rates.

  36. Breamrod
    May 9, 2020 at 11:00 am

    as we know “disruptive technology” is about driving ones old school competitors out of business. I think the only thing that will change this mindset is a big earth change. you know the kind that will go from “disruptive technology to disruptive death”!

    • Javert Chip
      May 9, 2020 at 2:27 pm

      Markets, especially capitalist markets, are usually pretty good at driving, or at least heavily facilitating, this kind of change. Think of it as corporate evolution.

      This entire 30-year era of dot.com & unicorns has been an interesting anomaly: individual investors knowing essentially nothing about finance (or technology), are being allowed (enabled?) to play venture capitalist.

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