I've been waiting for Ms Kaminska to do at least a little victory lap after last week's London employment tribunal ruling in the two test cases that a couple of Uber's drivers were indeed employees.As promised, cheap yucks. From Fortune, Dec. 20, a possible path to profitability:
I'm aware this thing is a long way from settled, appeals have already been filed, the ruling only applies to the two plaintiff drivers, no precedent outside the UK etc. but it is a big deal (and the ruling is a cracking good read) and it ties in perfectly to the fact Izabella was one of the only journos to focus on the shaky structure of the Ube's business model.
And in contrast to the more headline-making links that yours truly found giggle-worthy, stuff like:...MORE and definitely worth a click.
Uber Tried to Charge a Philadelphia Woman More Than $28,000 for a Ride
And the headline story from FT Alphaville:
There looks to be an interesting new development in the story that is the true state of Uber’s bottom line. That is, after all true liabilities and court judgments are accounted for.
But first, some related background.
A few weeks ago public transport expert Hubert Hogan, wrote an impressive four-part series on Naked Capitalism questioning the Uber model both on profitability grounds and public transport logic grounds. The conclusions were stark. Uber’s primary objective seems to be achieving monopoly at any cost (mostly by way of undercutting) and holding on to that position irrespective of whether it is actually making transport more efficient or not.
In the wake of those posts, Bloomberg’s Eric Newcomer (who had broken the original bottom line figures which Hogan had based his story on) entered into a heated exchange on Twitter with me regarding whether or not Hubert had correctly assumed Uber had failed to consolidate the full extent of its Chinese losses into those figures. Newcomer argued it had and that Hubert was thus exaggerating the scale of the investor subsidy propping up Uber’s global operations. Hubert on the other hand insisted — based on his experience working with Chinese transport JVs or partnerships — that it was unlikely Uber could have owned a majority stake in its Chinese business, and thus would not have been obliged to consolidate all the numbers into its bottom line. Without actually being able to see the accounts directly, or get a better understanding of the corporate ownership structure, it was difficult to verify either way.
Since then, however, Eric Newcomer has reported a fresh set of Uber numbers based on reporting by the Information noting:
Even as Uber Technologies Inc. exited China, the company’s financial loss has remained eye-popping. In the first nine months of this year, the ride-hailing company lost significantly more than $2.2 billion, according to a person familiar with the matter. In the third quarter, Uber lost more than $800 million, not including its Chinese operation.In short, the major turnaround that was expected following the disposal of Uber’s main loss-leading operation has yet to show up.
On the surface at least, this tends to confirm Hubert’s argument that Uber’s financial problems were not overwhelmingly just due to China. Those losses also appear to be at the Ebitdar level and the true bottom line on a GAAP basis is likely to be substantially worse.
So, while a bunch of media organisations are going with the top line that Uber’s losses are slowing, the more compelling take is probably from the likes of Vanity Fair which instead reports: UBER COULD LOSE ALMOST $3 BILLION THIS YEAR
But that’s that story.
Almost unnoticed in the hullabaloo following the latest accounts story, is this Wednesday morning post by QC tax specialist Jolyon Maugham, looking at the huge potential costs coming Uber’s way courtesy of the recent UK employment tribunal ruling that Uber is using workers rather than contractors in its operations....MUCH MORE