True price of an Uber ride in question as investors assess firm's value
What is the true cost of an Uber ride?
That simple question is often lost among the many controversies facing the ride-services company as it tries to hire a new chief executive and resolve a bitter dispute with the old one, Travis Kalanick.
But it may be the most important question of all when it comes to determining the value of Uber Technologies Inc [UBER.UL], which has built its business on massive subsidies to both riders and drivers, producing huge losses in the process, and has yet to show that it can maintain growth without them.
Uber will report second-quarter financials to investors this week, which will offer fresh insight on whether the company can get profitable any time soon.
Although private, Uber has started releasing limited quarterly financial data, and in May reported a loss of $708 million for the first quarter, down from $991 million in the fourth quarter. The upcoming financial report will show further improvement on margins, according to an Uber executive, but the company continues to spend heavily on subsidized rides in certain markets.
The issue of Uber's valuation is hardly academic amid a boardroom battle over control of the company. Early backer Benchmark Capital has sued former CEO Kalanick and fought with other investors, some of whom have offered to buy Benchmark out.
The question vexing everyone is what the company is worth. Benchmark in a series of Tweets earlier this month indicated it believed Uber will soon be worth more than $100 billion. Outside investors contemplating buying Uber shares, however, have indicated they think the company is worth less than its current $68 billion valuation - perhaps much less....MUCH MORE
Related, at Alphaville:
A question about Uber’s fake valuation