Uber says sales growth has outpaced losses

SAN FRANCISC O Uber Technologies Inc. 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 ride-hailing giant more than doubled gross bookings in 2016 to US$20 billion, according to financial information Uber shared with Bloomberg. Net revenue was US$6.5 billion, while adjusted net losses were US$2.8 billion, excluding the China business, which it sold last summer.

Uber declined to report firstquarter numbers, saying they were in line with expectations but that the company hasn’t yet presented them to investors. The company said it’s pleased to see revenue growth far exceeding losses last year and that its business is still performing well this year even as it faces unyielding controversy. “We’re fortunate to have a healthy and growing business, giving us the room to make the changes we know are needed on management and accountability, our culture and organization, and our relationship with drivers,” Rachel Holt, who runs Uber’s U.S. ride-hailing business, wrote in an emailed statement.

In recent months, Uber has seen an exodus of top executives as it investigates claims of sexual harassment and a toxic work culture. Uber is facing a lawsuit over selfdriving car technology from Alphabet Inc.’s Waymo, backtracked on a program called Greyball that was used to deceive government officials and apologized after its chief executive officer was videotaped arguing with a driver. Travis Kalanick, the CEO, said he’s seeking a chief operating officer to help right the ship.

Uber’s business is massive and getting bigger. In the last three months of 2016, gross bookings increased 28 per cent from the previ- ous quarter to US$6.9 billion. The company generated US$2.9 billion in revenue, a 74 per cent increase from the third quarter. Losses rose 5 per cent over the same period to US$991 million.

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.

Uber said it uses generally accepted accounting principles. Revenue includes only the portion Uber takes from fares, except in the case of its carpooling service; the company counts the entire amount of an UberPool fare as revenue. The more Uber’s business shifts to the multi-passenger service, the faster revenue grows. Non- GAAP revenue is significantly smaller. The loss statement doesn’t account for employee stock compensation, certain real-estate investments, automobile purchases and other expenses.

Valued at US$69 billion by investors, Uber operates in about 75 countries. The company was spending aggressively to compete in China, with about US$1 billion in losses there last year, bringing its losses to US$3.8 billion globally. It sold the China business in August. As part of the deal, it received an 18 per cent stake in local ride-hailing company Didi Chuxing and recognized the value of those shares in its financial statement. Uber said global net losses were US$1.2 billion after accounting for the sale, taxes and other factors.

Uber has burned through at least US$8 billion in its lifetime. The company said it has US$7 billion of cash on hand, along with an untapped US$2.3 billion credit facility.