Uber Headed for IPO, but Shows Huge Losses
Lots of folks are making some side money working for Uber and it's growing in popularity with users. But Uber has been in business since 2009 and is now available across the nation.
While Uber has seen growth, the company is facing some pretty significant losses according to this report from the Associated Press:
SAN FRANCISCO (AP) — Uber is providing a look under the hood of its business in the lead-up to its hotly anticipated debut on the stock market, revealing strong growth but an ongoing struggle to overcome huge losses and repair its reputation.
Documents released Thursday offered the most detailed view of the world's largest ride-hailing service since its inception a decade ago.
The massive filing shows Uber has been generating the robust revenue growth that entices investors, but also racked up nearly $8 billion in losses over its 10 years in existence, which mirrors the same trend challenging Lyft, Uber's main rival in the U.S.
Uber's revenue totaled $11.3 billion in 2018, a 42% increase from $7.9 billion in 2017, and a giant leap from $495 million in 2014.
The company posted a profit of $997 million last year, but that doesn't mean its ride-hailing service suddenly started to make money — far from it. The positive result stemmed from a windfall that Uber generated from the sale of its operations in Russia and Southeast Asia. The company said it sustained an operating loss of $3 billion.
The San Francisco company also disclosed a legal cloud hanging over its head as government authorities and regulators investigate whether the company broke any laws.
Among other things, Uber revealed the U.S. Justice Department is conducting a criminal investigation into a yearlong cover-up of a massive computer break-in during 2016 that heisted personal information belonging to millions of passengers and drivers.
Uber CEO Dara Khosrowshahi acknowledged the self-inflicted wounds that damaged the ride-hailing service's reputation while trying to make the case that the company has rehabilitated itself since he took over 18 months ago.
He struck his note of contrition and optimism in a letter included in the federal documents.
"Some of the attributes that made Uber a wildly successful startup — a fierce sense of entrepreneurialism, our willingness to take risks that others might not, and that famous Uber hustle — led to missteps along the way," Khosrowshahi wrote, closing his letter by assuring he will run Uber with integrity.
Kalanick is one of Uber's largest shareholders, owning nearly 9% of the company's stock.
Uber has been investing substantially in self-driving vehicles, which could be critical to reducing driver costs and achieving profitability. It launched its first self-driving test vehicle in 2016 and its self-driving car division has more than 1,000 employees, and it has built more than 250 self-driving cars so far.
But it suspended testing when one of its self-driving vehicles struck and killed a pedestrian in Arizona last year. The company resumed testing self-driving vehicles in Pittsburgh in December.
In its federal filing, Uber warned of the fierce competition it faces on that front from rivals such as Tesla and Google's Waymo, who it said could introduce autonomous vehicles earlier than Uber. The company also warned that potential future regulations or increases in insurance costs could impact the autonomous vehicle business.
Alphabet, the parent company of Google, owns 5% of Uber, even as it competes with Uber on self-driving technology. Alphabet also owns roughly 5% of Lyft's stock.