The Wall Street Journal - 09.08.2019

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WORLD NEWS

A similar dynamic has hap-

pened with some ride-hailing

rivals in other parts of the

world.

In Latin America, for in-

stance, revenue declined 24%

from a year earlier to $

million, a blow from a region

that had once been a source

of strong growth for Uber.

China-based Didi Chuxing

TechnologyCo. recently en-

tered the market there as a

ride-hailing rival.

Mr. Khosrowshahi ad-

dressed some concerns on a

call with analysts, saying that

he has heard the “meme” of

“Can Uber ever be profitable?”

The answer, he said, is a

clear yes, particularly at its

ride-hailing unit, which

“should turn out to be a spec-

tacular business long-term.”

Ron Josey, an analyst at

JMP Securities, said concerns

about profitability have been

high on investors’ minds, but

both Uber and Lyft appear to

be headed in a better direction

by making moves like increas-

ing prices on some routes and

paring back incentives.

“We feel better about them

both” as businesses, Mr. Josey

said. “Now that they’re public,

they’re more focused on prof-

itability.”

Uber showed improvement

on some key numbers in the

quarter. Uber’s loss excluding

charges such as stock-based

compensation, interest and de-

preciation was $656 million,

better than the $977 million

loss forecast by analysts

polled by FactSet.

Its “contribution profit,”

which excludes costs unrelated

to rides such as research and

primarily to the inclusion of

$3.9 billion of stock-based

compensation costs related to

its May initial public offering.

The company had a loss of

$878 million in the year-ear-

lier period.

Further weighing on the

results was a one-time charge

of $298 million for IPO-re-

lated payments to drivers.

Uber said if foreign-currency

changes and the driver IPO

payment were excluded, its

adjusted net revenue—a key

figure that excludes most

driver incentives—would

have risen 26% from the sec-

ond quarter of 2018.

On Wednesday, Lyft

boosted its outlook and re-

ported stronger-than-ex-

pected revenue.

Lyft also said the U.S. ride-

hailing market is getting less

reliant on discounts, suggest-

ing the price war with Uber is

abating.

Lyft’s financial chief Brian

Roberts said his company had

increased prices for riders in

late June on some routes in

some cities, a move he called

industrywide.

Mr. Khosrowshahi on

Thursday echoed comments

made by Lyft executives, say-

ing “we’re definitely seeing

the competitive environment

improve.”

Data from Second Measure

Inc. shows that the market

share between Lyft and Uber

in the U.S. has been relatively

stable, with neither making

notable gains this year. While

Lyft made strong gains on

Uber throughout 2017, Uber’s

share has hovered around 70%

for the past year.

Police in riot gear dispersed protesters Wednesday. Officers have made nearly 600 arrests since protests began in June. The force is the most visible face of government

FROM TOP: VINCENT THIAN/ASSOCIATED PRESS; MIGUEL CANDELA/SOPA IMAGES/ZUMA PRESS

development, hit $98 million.

The measure, which Uber ex-

ecutives focus on internally as

a show of the health of the un-

derlying business, had been

negative for the previous two

quarters, drawing concerns

from analysts.

Uber completed 1.68 billion

rides and delivery trips for the

quarter, better than the 1.

billion predicted by analysts.

The ride-hailing giant’s

loss of $5.23 billion was due

Latin American

revenue suffered as

competition in ride

hailing heightened.

tal investors to be a market

where one player would domi-

nate, it has turned into a

crowded field, fueled by bil-

lions of dollars that have

flowed into the sector. That

has kept price wars alive and

profits elusive.

While the intensity of the

race in the U.S. appears to be

diminishing, venture-capital

investors have recently flocked

to food delivery, boosting

many competitors.

ContinuedfromPageOne

IPO Costs

Push Uber

To Big Loss

perform their best to help

Hong Kong get back on track,”

he said.

Hong Kong’s police was re-

made in the 1970s from a force

criticized for corruption to one

built around the beat-cop civil-

ity of British “Bobbies.” That

reputation is getting eroded by

its increasing use of force to

combat protesters who have

grown more aggressive.

Hong Kong’s police said they

have made nearly 600 arrests

and fired more than 1,

rounds of tear gas and at least

160 rubber bullets since the

protests began in June. The

smell of tear gas wafting in

residential areas and videos of

police clad in riot armor club-

bing protesters have sparked

accusations of excessive force

by protesters and residents.

Antipolice anger surged last

month after dozens of men

with sticks burst into a subway

station and injured some 45

people, including a pregnant

woman. Police arrived around a

could threaten Hong Kong’s

special status as a free-market

financial hub connecting China

and the West.

“No one wins in all this. Not

the police, not the protesters,”

a Hong Kong officer said dur-

ing a lull battling a protest.

A dozen other exhausted of-

ficers sat on the ground

nearby, drinking water and

catching their breath. After a

short break, they were back

out in sweltering heat, march-

ing protesters off the streets

with riot shields and tear gas.

The force has become the

most visible face of a local

government that has remained

largely offstage and emerged

in recent weeks chiefly to ad-

monish protesters and refuse

any compromise.

Police officials are hosting

daily news conferences, while

the appearance on Monday of

the city’s Beijing-backed chief

executive, Carrie Lam, was her

first in nearly two weeks. S

Police spokesman Tse Chun-

chung defended the use of tear

gas to disperse a crowd that

gathered the night before to

protest an arrest. “The police

will stand their ground and

half-hour after the first emer-

gency calls.

Critics accused them of de-

laying their response to allow

the gang to carry out the beat-

ings. Police arrested several of

the men days later and said

some had links to Hong Kong’s

underworld of “triad” mafias.

Protesters now chant “tri-

ads! triads!” and “corrupt cops”

when police appear.

Police officials defend their

performance, deny using exces-

sive force and reject condoning

gang attacks on protesters. Offi-

cials said the delayed response

reflected how the force has be-

come stretched thin dealing

with demonstrations.

Much of the local rage fo-

cuses on the police. After dark,

the most hard-core demonstra-

tors have started gathering out-

side police stations across the

city of seven million, chanting

and shining laser pointers in

windows.

Tensions boil over, with

demonstrators pelting the

buildings with objects or start-

ing fires and riot police con-

fronting the protesters.

—Wenxin Fan

contributed to this article.

HONG KONG—With Hong

Kong’s summer of unrest esca-

lating, its police are in a bind.

The local population increas-

ingly accuses them of inflam-

ing protester rage by using ex-

cessive force, while mainland

Chinese authorities are exhort-

ing them to get tougher.

It is a precarious spot for

the 34,000-member Hong

Kong Police Force. Police

themselves have become tar-

gets, with some demonstrators

gathering outside police sta-

tions and dwellings, throwing

projectiles, lighting fires and

smashing vehicles before

clashing with riot squads.

Raising the stakes further

are hints that China could de-

ploy its military to restore or-

der if officials in Beijing con-

clude local authorities can’t

handle a crisis spinning out of

control—a last resort that

BYJOHNLYONS

Hong Kong Unrest Tests Police

Protesters rail against

officers’ use of force

while China presses

for tougher action

ple will become much easier.”

Mr. Modi’s comments come

as India scrambles to contain

domestic and international re-

verberations from the deci-

sion, which Hindu nationalist

supporters in his Bharatiya Ja-

nata Party have long sought.

The Indian-administered por-

tion of Kashmir, separated from

Pakistan by a heavily militarized

line of control that has served

as an unofficial border since just

after the two countries were

partitioned in 1947, has been

rocked by violence over the de-

cades and India has fought reb-

els and confronted anti-Indian

protests in recent years.

India has made the move at

a sensitive time, however, just

months after the two nuclear-

armed countries exchanged air-

strikes after a bombing in Kash-

mir claimed by a Pakistan-based

extremist group. The decision,

which has been accompanied by

a blanket military clampdown

in Kashmir, also complicates

U.S. efforts to close a peace deal

with the Taliban that would al-

low President Trump to fulfill a

campaign promise.

Pakistan, whose influence

over the Taliban U.S. negotia-

tors are counting on, has stri-

dently criticized the Indian

move and appealed to the U.S.

and other countries to put

pressure on India to reverse

the decision. Pakistan officials

have said they may move

troops from along the coun-

try’s border with Afghanistan,

where U.S. officials want them

to help pressure the Taliban

into a cease-fire, to near the

border with Kashmir to closely

manage the situation there.

As Mr. Modi underscored in

his speech, India considers the

status of Jammu and Kashmir

purely an internal concern of

India, a longstanding position

India has reiterated since the

move on Monday.

In Kashmir, the military

lockdown and near-complete

communications blackout con-

tinued for a fourth day. Police

said hundreds of people have

been arrested since Sunday.

NEW DELHI—Indian Prime

Minister Narendra Modi, in his

first public comments since

his government’s move to end

the autonomy of the disputed

state of Jammu and Kashmir,

dismissed concerns about last-

ing unrest after a military

clampdown is lifted and said

the new status would help the

economy and boost the wel-

fare of Kashmiris.

In the 40-minute nationally

televised address, Mr. Modi

criticized the unique autonomy

India’s only Muslim-majority

state had before as encouraging

anti-India sentiments. He said

it had become a weapon for In-

dia’s enemy Pakistan, which

also claims the area as its own.

“The people of Kashmir and

Jammu have been strong

enough to thwart any conspir-

acy by Pakistan to fuel terror-

ism and separatism,” he said. “I

assure the situation will gradu-

ally improve and the life of peo-

BYBILLSPINDLE

ANDRAJESHROY

Modi Defends Decision to End Kashmir’s Autonomy

A student protested the scrapping of Kashmir’s special status in New Delhi on Thursday.

ANUSHREE FADNAVIS/REUTERS

FROM PAGE ONE

The U.S. raised the level of

its advisory for citizens travel-

ing to Hong Kong, asking them

to exercise increased caution

and citing protests that have

already bitten into tourism.

The U.S. moved its advisory

to the second-lowest level,

which it also maintains for

mainland China, citing legal is-

sues there.

The State Department said

in a travel notice that some

protests have turned confron-

tational or resulted in clashes.

“The protests and confronta-

tions have spilled over into

neighborhoods other than

those where the police have

permitted marches or rallies,”

it said.

A spokesman for the city’s

government said, “Hong Kong

remains a welcoming city for

tourists and travelers from

around the world.”

The U.S. is among 22 coun-

tries that have issued travel

advisories for Hong Kong, said

Edward Yau, the city’s eco-

nomic-development secretary.

Others include Australia,

Ireland, Japan and the U.K.

Tourism arrivals to Hong Kong

were down 31% in early Au-

gust compared with a year

earlier, Mr. Yau said.

In recent weeks, the pro-

tests have become more fre-

quent and unpredictable.

Schedules discerned from pro-

test chat groups are circulated

among ordinary residents so

that they know how to plan

travel around protest sites.

Tourism-reliant businesses

are worried, though. Cathay

Pacific Airways Ltd., the terri-

tory’s flag carrier, said in its

first-half earnings report that

the protests reduced inbound

passenger traffic in July and

have hurt bookings.

Saudi tourist Najla Aziz’s

first impression of Hong Kong

was a black-clad crowd march-

ing on Saturday in Tsim Sha

Shui, a shopping and nightlife

district. Because of a blocked

road, she had to walk a few

blocks with her luggage, as her

taxi driver couldn’t get to the

hotel’s doorstep.

BYNATASHAKHAN

ANDJOYUWANG

U.S. Tells

Travelers

To Exercise

Caution