The most important thing to know about Uber was buried deep in the business pages of the New York Times on Saturday.
There, squeezed between the obituaries and the jump from a page-one feature on Bill O’Reilly’s future on Fox News was a little item on Uber’s financial results.
It said the company continues to grow at an astounding pace. Gross revenue rose to $20 billion in 2016, double the amount in 2015, and net revenue was $6.5 billion. So despite its recent troubles – which are plenty serious – Uber is thriving. Twitter boycotts, rider backlash and a slew of negative news articles seem to have had no effect on its revenue growth.
With that kind of growth, Uber has time to fix its problems.
Most news outlets barely covered Uber’s financial results, and the reports that did appear were much shorter and – let’s face it – far less entertaining than recent tales of Uber’s devious software, its spat with Google over self-driving-car technology and the bad behavior of CEO Travis Kalanick.
Still, it was a notable tactical win for Uber’s communications team, which smartly shared the financial results with Bloomberg – the first time Uber, a private company, had ever discussed its earnings beyond its small group of investors. It was a notable shift to offense after staying in a defensive crouch for weeks fighting through the negative coverage.
This bit of positive news won’t change the narrative on the company overnight, but it adds useful context. The message is that Uber’s growth is continuing and it has time to fix its problems. It can still raise capital from investors, attract and pay talented programmers and fund legal and publicity campaigns to defend its turf in regulatory battles – all of which are critical to its continued success.
Yes, Uber continues to run a huge annual net loss ($2.8 billion), which, according to some commentators, would have put it in the top ranks of corporate loss-makers if it were a public company. Of course losses of that magnitude are exactly why Uber remains private. It’s much easier to manage its business and communicate its performance to investors when there are just a few of them.
Investors should be grateful that growth is holding up. Uber has plenty of work to do to address its legal disputes, improve its culture and find the right senior executive to share the workload and provide a counterweight to CEO Travis Kalanick. As long as revenue is trending in the right direction, there’s time to accomplish these things according to the plan set out by Mr. Kalanick and the board. If growth stagnates, all that could change.
Investors should not expect Uber to become a model of harmony and enlightened corporate management, at least not as long as Mr. Kalanick, Uber’s largest shareholder, is the CEO. He belongs in the category of CEOs to invest with rather than work for – a group that includes other tech sector CEOs like Steve Jobs and Larry Ellison. But Uber looks set to continue as a model of innovation, disruption and financial success.