Ride-sharing leader Uber Technologies Inc. reported Thursday that it’s had some success in reducing payment card acceptance costs, though it didn’t say by how much.
“We continue to make good progress,” Nelson Chai, San Francisco-based Uber’s chief financial officer, said on a late-afternoon conference call with analysts to review the company’s second-quarter results. “I would say the team has done a very, very good job in terms of reducing some of the payment card fees. A lot of it is working with our partners, and we’ve able to reduce some of the things. It literally has been better than we would have expected, both on a quarter-on-quarter and year-on-year basis.”
Uber didn’t disclose card-acceptance costs in its latest financial report, but Digital Transactions News estimates the bills total at least $1 billion a year. That estimate is based on figures from the registration statement Uber filed ahead of its May initial public offering of stock. The document said Uber paid $749 million in credit card processing fees in 2017, up 62% from $461 million in 2016. While the filing didn’t give 2018 acceptance figures, it did say 87% of Uber’s gross bookings last year were on credit or debit cards.
Next up for Uber in the payments area is “testing, broadening out some of the capabilities, particularly in Latin America,” Chai said without being specific. The goal is to give drivers options to operate more frequently and to reduce cash payments in some markets, particularly Brazil.
Anything Uber can do to reduce expenses will be welcomed by its top brass and investors in light of the $5.24 billion loss the company reported for the second quarter versus an $878 million loss a year earlier. Though much of the recent red ink is attributable to IPO expenses, including $3.9 billion of stock-based compensation costs and a $298 million “driver-appreciation” award, Uber still finds operating profitability elusive.
Uber reported $15.8 billion in second-quarter gross bookings, up 31% year-over-year. Uber’s bookings typically come through its mobile app. Revenue increased 14% to $3.17 billion. The company said it had 99 million active customers who used its ride-sharing, other mobility options, or the Uber Eats restaurant-delivery service at least once a month in the second quarter, up 30% from 76 million a year earlier. Uber drivers made 1.68 billion trips in the second quarter, a 35% year-over-year increase from 1.24 billion.