What's going on?

Despite the recent resignation of its CEO and a string of PR scandals, Uber reported that its sales continued to grow in the second quarter and that it was moving closer to turning a profit.

What does this mean?

Uber spends more cash than it actually earns (it funds the difference mainly with cash raised from investors), but the company�s been trying to prove that its business model is sustainable and can eventually net a profit.


While it did post a loss of $645 million last quarter, that�s almost 10% less than it lost in the first quarter of this year and 35% less than the quarter before that. It also reported that its bookings jumped by 17% versus last quarter. Altogether, it suggests that Uber�s revenues are growing more quickly than its costs are � which, if sustained, should put it on a path to profitability.

Why should I care?

For markets: Uber�s trying to win back investor confidence ahead of a possible IPO.

It�s been a tough year for Uber: the company suffered from the forced resignation of its CEO (who still hasn�t been replaced), sexual harassment scandals and accusations of intellectual property theft. Even more recently, some big investors in Uber have said they don�t think the company is worth as much as it used to be. Uber�s announcement that its losses are decreasing is likely part of its effort to win over potential new investors as it prepares to possibly become a publicly traded company (a.k.a complete an IPO) � but it likely has to show progress on its other problems as well.

The bigger picture: Uber�s costs are decreasing as it scales back in developing markets.

One way that Uber cut its losses was to scale back its costly wars to become the dominant ride-hailing service in markets across the world, including China and Russia. One market where it�s still waging an expensive uphill battle is Southeast Asia, and some of its investors think Uber should cut its losses there as well.