Uber is still a growing business despite its leadership strife
- Author: Neal Todd Aug 27, 2017,
Aug 27, 2017, 0:43
Travis Kalanick, Uber's co-founder, resigned as CEO on June 20, only several days before the end of the second quarter. Globally, in all of its markets, trips are up 150% on this time previous year. The number of global trips on the app increased 150 percent over the previous year, with growth strongest in developing markets. Uber had $US6.6 billion in cash at the end of the second quarter, down from $US7.2 billion at the end of the first quarter.
The continued growth in ridership suggests Uber's core business has so far weathered a string of scandals.
Benchmark filed its suit earlier this month, alleging that Kalanick in 2016 misled Uber into approving three new seats on the company's board of directors and granting him appointment powers.
Some investors are skeptical of the current $68 billion valuation given Uber, and recently four investors of mutual funds marked down the shares of Uber they hold by up to 15%.
Uber's many crises have emboldened the company's competitors.
China's Didi Chuxing raised $5 billion this year while Lyft Inc. donated $1 million to the American Civil Liberties Union on the heels of criticism leveled at Uber for its connection to President Donald Trump.
Removing Kalanick from the board was necessary "to ensure Uber is protected from Mr. Kalanick's corrosive influence and can promptly obtain the new leadership it needs to move forward", Benchmark's court filing said, referring to Uber's search for a new CEO. Uber doesn't include the cost of stock-based compensation in its losses.
The fact that Uber was able to post increased bookings and revenue in the second quarter despite all these problems, however, should not come as a sign that the company can take a breather. This is nine percent less than the $708 million loss in the first quarter of the year.
Uber, despite all the drama and turmoil surrounding the ride-hailing company, actually did better in the second quarter compared to the first quarter, showing resiliency for a business that is still growing.
Uber, facing myriad lawsuits, also has $6.6 billion on hand and says it has an adjusted net revenue of $1.75 billion up from $1.5 billion in the first quarter. Its head of finance, Gautam Gupta, left Uber this year for the startup OpenDoor.