Though Uber has been valued by its investors at nearly $70 billion, new information from the company about its 2016 financials reveals that while more cash is coming in, the ride-hailing behemoth continues to hemorrhage money.
Uber confirmed to Bloomberg News that between the third quarter and fourth quarter of 2016, the company grew gross bookings — how much customers spent with Uber — by 28 percent to $6.9 billion. In that same time, Uber’s net revenue, the cut that Uber takes from is fares, rose 74 percent to $2.9 billion. Losses, by comparison, grew only 5 percent to $991 million.
Uber emphasized that its sales are growing at a faster pace than its losses, suggesting that the company is on a track to profitability, especially since it sold off its even more unprofitable China business to rival Didi Chuxing in 2016.
For Uber’s investors, the numbers must look promising. But there are still reasons to remain somewhat skeptical of the overall health of Uber’s business.
For example, while the company counted as revenue only its own commissions from traditional Uber rides, it counted as revenue entire fares from its carpooling UberPool service — in other words, it also included what UberPool drivers make from every ride in its calculation. And although Uber says these numbers stick to Generally Accepted Accounting Principles, it is unclear if these numbers have been independently audited.
Most critically, the company is bleeding not just cash, but senior executives. Uber’s president, engineering chief, policy and communications lead, and VP of product have all left the company within the last several weeks. And stories about ethically and legally suspect software used to kneecap both regulators and competitors continue to emerge, calling into question the leadership of CEO Travis Kalanick.
While an improving business is what will matter most to Uber’s investors, whether the company and Kalanick can sustain that growth going forward is a different matter.
A representative for Uber did not immediately respond to a request for comment.