Uber Losing Billions as It Eyes Self-Driving Future

Uber’s latest financial results suggest the company was glad to end its expensive court battle with Waymo but is still anxious to get driverless cars on the road.The ride-hailing giant told investors it lost $4.5 billion in 2017, according to a Bloombergreport. But excluding legal expenses and some other costs, such as stock-based compensation and taxes, the loss was only $2.2 billion.

A week ago, Uber was facing a $1.8 billion trade-secrets lawsuit by Waymo in a case that set a record for packing lawyers into Judge William Alsup’s federal courtroom in San Francisco. Each side had nine attorneys on hand for the opening arguments.

settlement reached last Thursday ended what was expected to be a three-week trial, as Uber gave Alphabet’s autonomous car business a $245 million equity stake and a commitment not to use the company’s trade secrets. Waymo had accused Uber of using eight stolen hardware secrets in a frantic bid to catch up in driverless cars.

Self-driving cars are cool, but they’re also a key part of Uber’s financial future, holding out the prospect of running its ride-hailing business without drivers. That would eliminate both a huge portion of Uber’s costs and a part of its business that has led to controversy and legal battles.

“This war for self-driving is truly existential for Uber: we’ll either start up our second S curve of growth or we’ll die,” Uber Chief Product Officer Jeff Holden wrote in an email to then-CEO Travis Kalanick in 2016 that was presented as evidence in the trial.

The ultimate business model of the money-losing company, founded in 2009 and now worth an estimated $68 billion, may depend on driverless cars. Uber is taking in more money than ever. In last year’s fourth quarter, its net revenue was $2.22 billion, up 61% from a year earlier, Bloomberg reported. Sales for the whole year reached $7.5 billion, up from about $6.5 billion in 2016.

The company’s losses may be narrowing. For 2016, it reported an adjusted net loss of $2.8 billion, excluding results from its China business, which was sold off in July of that year. Still, the company ended 2017 with less cash than it started with: $6 billion, down 13% from the end of 2016.

Things may be looking up for Uber, which went through a dramatic and public meltdown last year over its internal culture and alleged spying practices.

In June, Kalanick resigned as CEO under pressure, though he remained on the company’s sometimes contentious board. Dara Khosrowshahi, a former Expedia executive, took over as CEO in August. In late December, Uber sold a 15% stake to Japan’s SoftBank Group, reportedly at a discount to its $68 billion valuation. And driverless cars are on the way: Uber has said it plans to offer autonomous rides commercially in 2019.

— Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia.


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