Uber-optimistic – Tom Slee

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As Uber loses more money, CEO Dara Khosrowshahi continues cross his fingers and dream.

Uber just announced its Q4 2020 earnings on February 10: a net loss of $968 million, or an “Adjusted EBITDA loss of $(454) million”.

Here’s Uber’s revenue (blue), profitability (orange) and number of trips (green).

The company still says it’s going to be profitable by the end of 2021. What’s the track record for such predictions? Let’s take a look…

When Gawker saw a leaked document in August 2015, showing losses at Uber, the company shrugged it off. “It’s the case of business 101: you raise money, you invest money, you grow (hopefully), you make a profit and that generates a return for investors.” Turns out the “investment” part is the easy part.
In January 2016, Amir Efrati of The Information saw some internal projections. “The projection suggested Uber would generate an $8.2 billion profit in 2019 from $22.7 billion in net revenue. During the next four years, according to the projection, Uber would expect to generate nearly $14 billion in profit in developed markets.” A little excess of enthusiasm there: actual revenue $14B, actual profit -$8.5 billion. Maybe they got a sign wrong.
On February 18 2016, then-CEO Travis Kalanick said Uber is “profitable in the USA, but we’re losing over $1 billion a year in China”. Uber sold its China operations in August 2016; still not profitable.
In March 2016, Kalanick “sees profits in China in 2 years’ time”. He claimed that “the company, which currently operates in 400 cities around the world, will not be able to scale up without investing and being unprofitable for a while.” Five years of scaling later, “for a while” is stretching it.
In June 2016, Kalanick “revealed” that Uber is profitable (excluding interest and taxes) in “several markets”. No evidence yet.
At Davos in January 2018, CEO Dara Khosrowshahi says Uber will be “profitable in three years”. And here we are, three years later. OK, give them a break because of Covid, but it was Khosrowshahi himself who said, in May 2020, “We believe the disruption caused by Covid-19 will impact our time line by a matter of quarters and not years”.
In April 2018, Eric Meyhofer, head of the autonomous-driving unit, said “This is all about building autonomous ride-sharing, at scale, as a product. This is our future… The question now isn’t whether the company can make a self-driving vehicle but whether it can make one quickly and cheaply enough to solve [Uber’s] revenue problems.” Answer apparently in the negative.
In May 2018, he said “We’re in a good position in terms of the company’s profile, in terms of profitability and margins continue to get better”. The chart above begs to differ.
In May 2018 Dara saw a commercial “urban air mobility” service by 2023. Because why not?
In September 2018, he said that “ride hailing will be eclipsed by scooters, bikes and even flying taxis”. Solid grasp of the fundamentals.
In May 2020, Uber destroyed “thousands of electric bikes and scooters, after selling its Jump business to Lime.” Can’t fault Dara for trying?
In December 2020, Uber sold its self-driving unit. But did not change the optimistic story, even though autonomous cars were seen as central to the company’s future for years.
And its flying taxi business. Not so central.
A year ago, on February 6 2020, Uber said it had a target “to achieve a measure of profitability to the fourth quarter of 2020, but the ride-hailing company still expects to lose a total of more than $1 billion this year”. It lost $6.8B.

So, still not profitable.