Uber Technologies said its head of finance is leaving as the ride-hailing company reported continued big losses despite growing revenue, adding to an exodus of top officials and setting the stage for a second major executive search.
The ride-hailing company on Wednesday told The Wall Street Journal first-quarter revenue was $US3.4 billion, up 18 per cent from the fourth quarter. Its loss, excluding employee stock compensation and other items, was $US708 million, narrower than the $US991 million reported three months earlier.
The company, which has raised some $US15 billion in equity and debt funding, said it still has $US7.2 billion of cash left on hand, about the same as it had at the end of last year.
Uber is privately held so it isn’t required to release financial results, but since April has begun offering a glimpse as it considers an eventual initial public offering. It didn’t release year-ago results. “The narrowing of our losses in the first quarter puts us on a good trajectory towards profitability,” an Uber spokesman said.
Uber said its head of finance, Gautam Gupta, 37 years old, is leaving the company in July to join another start-up in San Francisco. The company declined to disclose the name of the start-up or comment further.
Since 2015, Uber has been without a chief financial officer after Brent Callinicos took on an advisory role and left to join transportation start-up Hyperloop One the following year. Mr Gupta, who joined Uber in 2013, served under Mr Callinicos as head of finance but wasn’t elevated to the financial chief position.
Uber said it would now search for a chief financial officer, putting it in the delicate position of hiring two top deputies for chief executive Travis Kalanick while grappling with a series of scandals. The hires could prove pivotal if the world’s most valuable start-up, which is valued by its investors at nearly $US70 billion, hopes to one day win over Wall Street.
Since early March, when Mr Kalanick said he needed management help, the company has interviewed candidates for its first chief operating office, interviewing executives from companies including Wal-Mart Stores Inc. and Walt Disney Co., The Wall Street Journal has reported. Uber has declined to discuss specifics of the search.
So far this year more than a dozen executives and top managers, many reporting to Mr Kalanick, have either resigned or been fired by Uber while the company has come under intense scrutiny, sparked by a report from a former female engineer alleging pervasive sexual harassment and sexism. The alleged conduct, which Mr Kalanick condemned, prompted a broad investigation into its workplace led by former US Attorney General Eric Holder. A formal report is set to be released next week.
The company is also contesting a lawsuit by Google parent Alphabet Inc. over alleged trade-secret theft that led to the firing of the former head of its self-driving car division, Anthony Levandowski. At the same time, Uber faces a federal probe into the use of a software tool it designed to thwart regulators from cracking down on drivers, and in recent weeks it said it had short-changed drivers in both Philadelphia and New York City by a combined tens of millions of dollars because of faulty accounting. Uber has declined to comment on the federal probe.
Mr Kalanick is managing all of this while suffering a personal tragedy this past weekend, when he learned his mother had died in a boating accident that left his father serious injured.
Until these series of events, Uber was widely believed to be headed toward an IPO as soon as next year. The company hasn’t publicly disclosed when it plans to hold an IPO.
Beyond putting to rest the controversies, Uber will likely need to iron out a business model that led to at least $US2.8 billion in losses last year, wiping out nearly half of its reported $US6.5 billion in sales.
The loss figure excluded a series of items including results from Uber’s business in China, which was losing about $1 billion a year and which it agreed to sell last summer to rival Didi Chuxing Technology Co.
Uber generates revenue by taking a cut — generally 25 per cent — of a driver’s fares. Its gross bookings, which include the ride-hailing business, UberEats food delivery and Uber Freight, a new trucking division, rose 8.7 per cent to $US7.5 billion in the quarter ended March 31.
Uber’s revenue growth rate, however, fell between quarters to 18 per cent from 74 per cent in the fourth quarter. Uber says the final three months of the year are its busiest.
The company will likely search for a seasoned financial chief with a public-company background who can maintain Uber’s surging growth while containing the losses. The company has burned money by lowering fares in fiercely competitive markets and offering rewards for drivers to lure them from rivals. Uber has fought regulators, and drivers in court, to preserve a business model that relies on independent contractors, which don’t receive employee benefits or compensation for fuel, vehicle maintenance and other expenses.
Mr Kalanick has pushed Uber since last year to develop self-driving cars, which could drastically lower its costs by cutting out the human costs. But the company’s self-driving car division is clouded by the lawsuit from Alphabet, and this week’s firing of its top driverless-car executive, Mr Levandowski, nine months after buying his start-up for $680 million. Mr Levandowski, charged with conspiring to steal Google’s driverless-car secrets, hasn’t responded to requests for comment about the case or his firing.
Wall Street Journal
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