the ride-hailing company, is on a roll ó growing at an
extraordinary rate even in the face of virulent
governments, local regulators, taxi companies, direct
competitors. All are out to stop Uber or at least slow
it down. Some of its own drivers have filed a
class-action lawsuit against the company.
according to details from a leaked document published
Friday by Reuters wire service, Uber is a global force.
Total ride-share bookings are showing explosive growth,
from $688 million in 2013 to a projected $10.84 billion
this year and $26.12 billion next. Thatís nearly 38
times bigger in just four years.
are the most detailed numbers on Uber bookings to find
wide public distribution.
come from a presentation apparently used by Uber in its
latest round of funding, according to Reuters. Thus far,
the company has raised $7 billion from private investors
for an imputed market valuation of more than $50
takes about 20 percent of driver bookings and counts
that as revenue. Arithmetic would roughly put its 2015
revenue at $2 billion.
gem found in the presentation: Uber contemplates a
public stock offering in 18 to 24 months. That news
kicked off another flurry of speculation about whether
the company is generating earnings.
reached for comment, an Uber spokesperson said the
company does not comment on rumor and speculation.
think whatís really interesting is whether theyíre
profitable yet," said Hugh Tallents, a partner at
management consulting company Cg42.
answer: Itís almost certainly not. Uberís heavy
upfront investments are all part of the
"punch" approach that Thilo Koslowski, vice
president and automotive practice leader at research
firm Gartner, says Uber has employed from its very
beginning in 2010. It punches itself into markets and
spends big on advance teams, lawyers and lobbyists to
fight opposition and gain a foothold in markets around
document leaks ó sketchier than the latest ó have
shown Uber losing money, as many young companies do as
they aggressively grow.
is more aggressive than most. The ride-hailing service
currently operates in more than 60 countries. In the
U.S., you can hail an Uber in more than 150 cities. The
company recently said it plans to spend $1 billion in
China and another $1 billion in India to grow its
business. Chief Executive Travis Kalanack said he
expects the China market to exceed the market in the
got some observers worried.
everyone has the Uber app, every driver is using Uber,
and everyone is connected through Uber, thereís going
to be no room for anyone else to start a dispatching
service," said Evan Rawley, associate professor at
Columbia Business School.
that point, the company can increase its rates and
reduce its spending on subsidies.
bargain-then-rip-off pricing," Rawley said.
"Classic network effect."
Uber faces stiff competition in India and China, where
one ride-hailing company, Didi Kuaidi, is partly
financed by Chinaís sovereign wealth fund.
Europe and South Korea, the company faces regulatory
battles over the legality of its service, with Spain and
France banning the service because Uberís drivers donít
carry the required permits to operate commercial
the States, the company is facing a class-action lawsuit
over worker misclassification.
these hurdles, Uber remains bullish.
said the numbers in the presentation seem "a little
too high" and are probably on the top end of the
companyís projections, but he said he didnít doubt
Uber had the potential to pull in such revenues.
is a gold mine for Uber," Koslowski said.
"Thatís why the company is getting so much
funding from investors. Itís no secret they make a lot
of revenue, we just donít know whatís left after
their spending. Once the spending is reduced, these
revenues will turn into profits."
there are the opportunities Uber hasnít even talked
much about. Steve Sarracino of growth equity firm
Activant said the company is currently in the business
of transporting people, but its own business model is
paving the way for ancillary services such as the pick
up and delivery of physical goods, the transportation of
workers and, potentially, optimizing traffic flow. The
company is also developing self-driving cars.
believes that of all the multibillion-dollar tech
companies to have emerged over the last 10 years, "Uber
is most likely to challenge Google (at) providing
game-changing technology," he said. "Uber has
a dominant core product that Ö will provide cash flow
to invest in adjacent products and markets. Not even
Facebook or Amazon will have this type of flexibility
because they lack adequate cash flow."
for whether the company could go public within the next
two years as the investor presentation forecasts,
Koslowski said the San Francisco company could go
public, but that doesnít mean it should.
doesnít seem like they have any problems securing
funding and investment, and really, you want to (have
an) IPO to expand your base to get more funding,"
he said. "I donít think the company needs that at
believe that Uber has given them plenty of reason to
feel confident about the company, even if its profit
margins are currently unclear.
expansion, for example, shows no sign of slowing down.
Its transformation into a household name also spells
good things for the brand.
easy to forget Uber is a colloquialism now,"
Tallents said. "Itís easy to forget the company
is not even 6 years old."