Uber cut its losses almost in half and its ride bookings jumped 51 per cent since one year ago, the Silicon Valley ride-services firm said on Wednesday, showing that months of scandal and retreating from overseas markets have not slowed its business.
Uber Technologies Inc also reported a one-time gain of $2.5 billion, income that came largely from selling its business units in Russia and Southeast Asia, a sign of how expensive Uber’s overseas operations can be when it tries to go up against local competitors.
The overall improvement of the company’s finances, reflected in Uber’s first-quarter results, comes after a year of controversies that involved sexual harassment allegations, lawsuits from drivers and employees, allegations of trade secrets theft, federal investigations and the revelation of a massive data breach.
The results reflect the second full quarter under Uber Chief Executive Dara Khosrowshahi, who replaced founder and former CEO Travis Kalanick last year. Khosrowshahi plans on taking the company public next year, and must trim losses, hire a chief financial officer after a three-year vacancy and prove Uber can make a profit.
Also on Wednesday, Uber said it would hold a secondary stock sale for employees and existing investors that would value the company at $62 billion, up from the $48 billion valuation it commanded in a secondary sale late last year. Coatue Management, a new investor, and existing Uber investors Altimeter Capital and TPG will purchase up to $600 million of stock at $40 a share.
The transaction will launch next week and likely close at the end of June, Uber said. The deal does not bring in new money for the company but rather allows employees and investors to get some cash for their stock even as the company remains private, a sign that Uber management is trying to appease long-time shareholders antsy for a payout.
In Uber’s previous secondary stock sale, which was led by SoftBank Group Corp, there were so many eager sellers that shareholders could sell only a fraction of what they wanted. In that deal, investors bought shares for $33 each.
Uber reported ride bookings of $11.3 billion for the first quarter, up 4 per cent from $10.8 billion in the previous quarter and 51 per cent from $7.5 billion a year ago. Its revenue was $2.6 billion, up 8 per cent from $2.4 billion last quarter and 73 per cent from $1.5 billion a year ago.
When excluding the gain from Uber’s sale of its Southeast Asia business to rival Grab and its Russia business to competitor Yandex, as well as other one-time transactions, the company lost $312 million, much less than the $775 million it lost last quarter and an improvement from the $598 million lost a year ago.
Uber said it spent $700 million over five years in Southeast Asia and $170 million on its Russia business during its more than three years there. The company gained about $3 billion after selling those businesses, which followed Uber’s sale of its China business to competitor Didi in 2016, as overseas markets prove increasingly costly and difficult.
But Uber cautioned not to expect a profit any time soon.
The company plans to re-invest the money on growing its food-delivery service, Uber Eats, and bike-renting service. Uber last month bought JUMP, an electric bike service start-up, as part of its effort to expand its transportation offerings.
“We are off to a terrific start in 2018,” Khosrowshahi said. “We plan to reinvest any over-performance even more aggressively this year, both in our core business as well as in big bets like Uber Eats globally.”
At the end of March, Uber had about $6.3 billion in cash, thanks in part to a $1.25 billion direct investment by SoftBank and others, Reuters reported.
Even with a smaller global footprint, Uber has risky and expensive efforts including its autonomous car unit, which has been under scrutiny since a self-driving Uber SUV hit and killed a woman in Arizona in March. Uber on Wednesday said it had shut down its Arizona self-driving car operation, although it plans to continue testing the vehicles in California and Pittsburgh, Pennsylvania.
