Uber is huge and blowing lots of cash to stay huge. Finance reports revealed to investors show the ride sharing titan lost $4.5 billion (£3.2 billion) in 2017, its annus horribilis that began with accusations of heinous sexism and ended with bombshell revelations about a dubiously legal network of spies. Co-founder and CEO Travis Kalanick was replaced by Dara Khosrowshahi, who promises a kinder, gentler Uber in 2018.
It’d be easy to chalk up the $4.5 billion figure to Uber’s many, many scandals, but both Bloomberg and The Information’s read of the finance report also points to Uber’s exhaustive growth strategy, even as PR cataclysms dominated headlines. Regardless of cause, this number is absolutely gigantic, and way up (by about 60 per cent) from the amount of cash Uber burned in 2016.
Uber also generated more money last year, and the company seems to be spending more efficiently in some areas, as it pushes for an ever greater share of the market. Uber increased its net revenue in the fourth quarter of 2017 by 61 per cent to $2.22 billion (£1.58 billion), according to Bloomberg. Meanwhile the amount Uber spent on customer support, sales, and marketing reportedly decreased at the end of 2017.
Broadly, this was always Uber’s plan. The company wants to assure us that it’s burning through enormous amounts of cash by design. Uber wants to dominate ride sharing at all costs and, thanks to brand dominance and heavy investments from places like Softbank, which handed over $1.25 billion (£892 million) in January, Uber is well on its way. What remains to be seen is how we’ll all fare when and if Uber holds the defacto monopoly on ride sharing. Will we sweep through cities in Uber-branded metropolitan driverless cars or Uber-branded buses? If 2017 couldn’t stop Uber’s path to dominance, one wonders what will happen once Uber achieves its goals. [The Information, Bloomberg]