Uber CEO predicts Amazon-style losses to fuel lofty goals
While Amazon had almost $178 billion in sales in 2017, net income was $2.24 billion. “Cars are to us what books are to Amazon,” he said.
Speaking at a conference in San Francisco, Uber Technologies Inc. Chief Executive Officer Dara Khosrowshahi rattled through the company’s ambitions: food delivery, freight, autonomous vehicles and even buses and bikes.
Ultimately, Uber’s business is getting people from “point A to point B,” he said at a Goldman Sachs-hosted event on Wednesday. Achieving such goals means the company will continue to lose money, he acknowledged, a day after Uber reported a loss of $4.5 billion for 2017 on $7.5 billion in net revenue.
To drive home his point, Khosrowshahi compared Uber to Amazon on more than one occasion. While Amazon had almost $178 billion in sales in 2017, net income was $2.24 billion. “Cars are to us what books are to Amazon,” he said. Khosrowshahi said that by 2023, he could imagine Uber providing the entire transportation network for a city.
Uber started out as a car-booking service, but has since expanded into ride sharing and food delivery, while testing autonomous vehicles and transport of goods. The San Francisco-based company has raised approximately $19 billion in funding and has a blended valuation of $54 billion, making it the biggest venture-backed technology enterprise without a stock listing.
“We’re a publicly reporting private company — go figure,” Khosrowshahi said. The CEO said that while he’s somewhat uncomfortable running a money-losing business after joining from profit-generating Expedia Inc., it’s the right strategy for Uber. If the ride-hailing provider were to shed its younger businesses, Uber could become profitable but it would miss out on promising opportunities, he said.
“The business that was handed to me was a better business than I thought,” Khosrowshahi said, adding that he still needs to improve Uber’s brand. He’s been trying to “bring peace to the kingdom,” he said. Last week, Uber’s settled its trade-secrets fight with Alphabet Inc.’s self-driving car unit, Waymo. The fact that neither side was happy with the settlement was proof that it was a good deal for both sides, the CEO said. He also celebrated the governance reforms that went into effect after a financing deal with SoftBank Group Corp.
“Rather than having their capital cannon facing me, I’d rather have their capital cannon behind me,” Khosrowshahi said of the Japanese telecommunications provider and tech investor. He also reiterated Uber’s interest in holding a public offering in 2019.
Uber is looking to partner with autonomous-vehicle companies, the CEO said, adding that the company is prepared to slowly integrate autonomous vehicles in its network filled with human drivers. By taking a “hybrid approach,” he predicted that Uber’s network of human drivers would only grow, even as Uber introduces autonomous vehicles.
Khosrowshahi opened the interview with Goldman Sachs President David Solomon with an audience-pleasing quip. He he joined Uber, he said, because it was a verb. “My father always told me if you can run a verb, say ‘yes.’”