Uber’s net loss widens to $4.5B after rocky year
Ride-hailing giant Uber’s full-year net loss widened to $4.5 billion in 2017 as the company endured a tumultuous year that included multiple scandals, a lawsuit alleging the theft of trade secrets and the replacement of its CEO.
The results also showed that Uber cut its fourth-quarter net loss by 25 per cent from the third quarter as new CEO Dara Khosrowshahi moves to make the company profitable ahead of a planned initial public stock offering sometime next year.
The full-year loss grew from $2.8 billion in 2016, a year with results skewed by a gain from the sale of Uber’s unprofitable business in China. Uber also said its U.S. ride-hailing market share fell from 82 per cent at the start of last year to 70 per cent in the fourth quarter. Uber said the share has now stabilized. Gross revenue for the year rose 85 per cent over 2016, to $37 billion.
For the fourth quarter, Uber’s net loss was $1.1 billion, down from $1.46 billion it lost in the third quarter. Bookings from fares rose 14 per cent to just over $11 billion for the quarter.
While the losses are significant, the results still are positive for Uber with revenue rising and losses falling in three of four quarters in 2017, said Rohit Kulkarni, managing director of SharesPost, a research group focused on privately held companies. The numbers show that Uber under Khosrowshahi is on a path toward profitability and a sustainable economic model, Kulkarni said. “If you draw that out further, a year from now, this could be a significant IPO waiting to happen,” he said.
Uber considers adjusted earnings before taxes as a better indicator of its financial performance rather than net earnings based on Generally Accepted Accounting Principles, which include losses for accounting purposes. On an adjusted basis, excluding stockbased compensation, legal costs, taxes and depreciation, the company lost $2.2 billion for the full year. The fourth-quarter adjusted loss was $475 million, down from $606 million to in the third quarter.
Last year was a particularly bad one for Uber with its reputation tarnished by the company’s acknowledgement of rampant sexual harassment within its ranks, a yearlong coverup of a major computer break-in and the use of duplicitous software to thwart government regulators.
CEO Travis Kalanick was ousted in June and replaced by Khosrowshahi in August.
This month Uber ended the autonomous-vehicle trade-secrets lawsuit filed by Alphabet’s Waymo for a payment of Uber stock valued by Waymo at $245 million.