Uber loses big during turbulent start to 2017
Published: June 26, 2017
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
Over the last few years, Uber has ridden a rocket ship to success. The company has largely done it while flipping a bird to authorities and governments in cities all around the world. Running roughshod over rules and laws, dodging taxes, and making an enemy of an entire industry (cabbies).
Uber’s ride has certainly been unconventional. Through it all, customers and investors have lapped it up and bought wholesale into the ride-sharing model. However, Uber is now facing its most testing time, as 2017 has so far not been kind.
The company has posted a loss of $708 million through the first quarter of the year and lost two high profile executives. One was Gautam Gupta, head of finance, while the other was the biggest of them all. CEO and Uber founder Travis Kalanick announced last week that he was resigning but will remain on the board.
While Uber has swept its way around the world and been successful, garnering a valuation of over $50 billion, it has never been a money-making machine. Indeed, in 2016 the company lost billions of dollars and was tagged as the heaviest loss-making private company in the history of Silicon Valley.
So, on the surface, $708 million losses may seem an improvement. However, it is worth noting that this is just for Q1. If similar losses occur through the rest of the year then a multi-billion-dollar loss is happening again.
Uber is a private company, so it does not have to indulge the public with its finances. This leaves the company in an interesting position. On the one hand, it has a high valuation and apparently solid investor support. However, the company is obviously unable to sustain heavy losses indefinitely, and investors may become worried.