Amid a sudden and seemingly endless stream of public relations disasters (senior execs leaving, sexual harrassment scandals, uncomfortable video clips, self-driving car fiascos, secret software programs, and mishandled DUIs), Uber opened up its books to Bloomberg, prompting one analyst to exclaim "this is a cash-burniung machine."
The last couple of months have been a constant PR battle for the CEO Travis Kalanick.
- Another tale of sexism and unacceptable workplace behavior in Silicon Valley company has emerged. This time it's at Uber, according to an explosive blog post published on Sunday by a former company engineer named Susan Fowler Riggetti.
- Uber's newly-hired VP of engineering Amit Singhal was asked to, and did, resign on Monday after the company learned from Recode that he was accused of sexual harassment shortly before leaving Google a year ago. Here's more on the difficult position of former employers in this case.
- A video showing Uber CEO Travis Kalanick rudely arguing with a long-time driver at the end of his ride was published by Bloomberg. "I need leadership help," Kalanick said in an apology he issued shortly after.
- Susan Fowler Rigetti, the former Uber engineer who wrote of discrimination, said she's hired attorneys after a new law firm began to investigate her claims. Uber confirmed it has hired Perkins Coie, which reports to former A.G. Eric Holder, who's leading the investigation.
- Uber said on Thursday that it will finally apply for a DMV permit to test self-driving cars in California after its cars' registrations were revoked in December because it refused to get the permit.
- Charlie Miller, one of the two famous car hackers who joined Uber's Advanced Technology Center in August 2015, announced he's leaving the company.
- The New York Times uncovered a secret Uber program called Greyball, through which the company uses software and data to evade law enforcement in cities.
- Keala Lusk, a former Uber engineer, published a blog post detailing how her female manager mistreated her, signaling that the company's problematic culture isn't limited to the men who work there.
- Ed Baker, Uber's head of product and growth, resigned. Though the reason is unclear, he was allegedly seen kissing another employee three years ago, which was anonymously communicated to board member Arianna Huffington, according to Recode.
- A report outlines a trip by a group of Uber employees to a Seoul karaoke-escort bar in 2014, which included company CEO Travis Kalanick and his girlfriend, Gabi Holzwarth. After arriving, several male employees picked escorts to sit with, and went to sing karaoke. Uncomfortable, a female marketing manager, who was part of the group, left after a couple of minutes, while Holzwarth and Kalanick left after an hour.
- California regulators have recommended that Uber be fined $1.13 million for failing to investigate and/or suspend drivers who are reported by a passenger to be intoxicated. The state requires ride-hailing companies to have a zero-tolerance policy for driving under the influence of alcohol or drugs.
- A new report says Uber used a secret program dubbed "Hell' to track Lyft drivers to see if they were driving for both ride-hailing services and otherwise stifle competition. Only a small group of Uber employees, including CEO Travis Kalanick, knew about the program, according to a story in The Information, which was based on an anonymous source who was not authorized to speak publicly.
But, Uber, according to The Wall Street Journal's Unicorn tracking database, remains the most valuable private company in the world.
In December we warned of the potential for massive losses at the ride-sharing company, and as Bloomberg's Eric Necomer reports, we were not wrong. Uber isn't required to report its finances publicly, but the privately held company has decided to forgo that luxury for the first time. Uber said its revenue growth is outpacing losses, hoping to show the business is on a strong trajectory as it attempts to address a recent cascade of scandals.
The good news is that the ride-hailing giant more than doubled gross bookings in 2016 to $20 billion, according to financial information Uber shared with Bloomberg, and net revenue was $6.5 billion. Uber’s business is indeed massive and getting bigger. In the last three months of 2016, gross bookings increased 28 percent from the previous quarter to $6.9 billion. The company generated $2.9 billion in revenue, a 74 percent increase from the third quarter.
However, adjusted net losses were $2.8 billion, excluding the China business, which it sold last summer. Losses in the last three months of 2016 rose 5 percent over the same period to $991 million.
Uber declined to report first-quarter numbers, saying they were in line with expectations but that the company hasn’t yet presented them to investors.
While the rate of sales growth compared with losses is encouraging, Uber is still losing a significant sum, said Evan Rawley, a business professor at Columbia University. “That’s a lot of cash to burn in a quarter,” he said. Jeff Jones, the company’s president of ridesharing who resigned last month, previously joked to staff that he joined Uber expecting P&L, meaning a profit and loss statement, but only found an L.
Bloomberg notes that Uber has burned through at least $8 billion in its lifetime. The company said it has $7 billion of cash on hand, along with an untapped $2.3 billion credit facility.
We leave it to none other than Aswath Damodaran, infamous valuation guru and finance professor at New York University - who nailed Theranos by warning in 2015 of numerous red flags about the unicorn...
"Uber is a one-of-a-kind company, in good ways and bad ways. It’s going to be a case study... This is a cash-burning machine."
And that Mr. Damodaran is what makes it worth $68 billion!!!???