Uber rev­enue up amid protest

The Star Early Edition - - BUSINESS REPORT - Bloomberg

UBER Tech­nolo­gies’ rev­enue in­creased to $3.4 bil­lion (R44.57bn) in the first quar­ter and losses nar­rowed, even as hun­dreds of thou­sands of peo­ple deleted its ride-hail­ing app from their phones.

The com­pany also said that its head of fi­nance, Gau­tam Gupta, was leav­ing. Gupta, who has long served as de facto chief fi­nan­cial of­fi­cer (CFO), even though he never earned the ti­tle, helped over­see in­vestor calls and run the fi­nance team.

But there had been per­sis­tent ques­tions from em­ploy­ees and in­vestors about whether he had the ex­pe­ri­ence to lead Uber through an even­tual ini­tial pub­lic of­fer­ing. Uber said it’s now search­ing for a true CFO who can woo Wall Street.

Uber has faced a se­ries of pub­lic-re­la­tions crises this year. The hash­tag #DeleteUber trended on Twit­ter as users re­moved the ap­pli­ca­tion from their phones in protest of the com­pany’s ties to US Pres­i­dent Don­ald Trump.

Chief ex­ec­u­tive Travis Kalan­ick left Trump’s busi­ness ad­vi­sory board in re­sponse. Then, af­ter Bloomberg pub­lished a video of Kalan­ick ar­gu­ing with an Uber driver, the em­bat­tled chief ex­ec­u­tive said he would seek lead­er­ship help. The com­pany is search­ing for a chief op­er­at­ing of­fi­cer and fend­ing off a law­suit from Al­pha­bet over driver­less-car tech­nol­ogy.

The San Francisco-based startup’s first-quar­ter loss was $708 mil­lion, shrink­ing from the $991m loss in the pre­vi­ous pe­riod. The com­pany’s abil­ity to boost rev­enue and nar­row losses even amid the cus­tomer protests re­flects the global na­ture of its busi­ness – most of the app dele­tions took place in the US. The first-quar­ter fi­nan­cial de­tails and Gupta’s exit were re­ported on Wed­nes­day by the Wall Street Journal.

Uber, val­ued at $69bn, has raised more than $15bn in fund­ing in its seven-year his­tory. Uber said it has $7.2bn in cash on hand.

In the fourth quar­ter, the com­pany gen­er­ated $6.9bn in gross book­ings and $2.9bn in net rev­enue. For all of 2016, Uber’s global losses, ex­clud­ing its China busi­ness, to­talled $2.8bn. The com­pany lost at least an­other $1bn in China last year.

In a note an­nounc­ing his de­par­ture to em­ploy­ees, Gupta said he’s leav­ing to join an­other San Francisco startup as chief op­er­at­ing of­fi­cer, “to take on a new chal­lenge”.

Kalan­ick praised Gupta in an e-mailed state­ment. “Gau­tam is a world-class fi­nan­cial tal­ent,” he wrote. “Over the past four years, he has been in­dis­pens­able in help­ing build Uber from an idea into the busi­ness it is to­day.”

Uber re­ports net rev­enue us­ing gen­er­ally ac­cepted ac­count­ing prin­ci­ples (Gaap), but this cal­cu­la­tion has draw­backs.

For its car pool ser­vice and in cities where it uses up front pric­ing, the com­pany records the en­tire fare as rev­enue in­stead of just the amount Uber keeps from driv­ers.

Uber’s non-Gaap rev­enue is sig­nif­i­cantly lower. In the fourth quar­ter, Uber gen­er­ated $1.4bn in non-Gaap net rev­enue. Last quar­ter, nonGaap rev­enue grew to $1.5bn.

Mean­while, Gaap rev­enue grew much more quickly as more peo­ple car pool.

PHOTO: REUTERS

A taxi with stick­ers say­ing, “Get out Uber”, at Chamartín train sta­tion, in Madrid, in a protest of taxi driv­ers against Uber and Cab­ify, which they say en­gage in un­fair com­pe­ti­tion.

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