Uber said to see financial growth, possible Waymo settlement
Uber says gross bookings increased more than 10% last quarter, and a lawsuit over self-driving cars from Waymo could be settled before a scheduled court date in October
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San Francisco: Uber Technologies Inc. tried to assuage investors’ concerns that a series of scandals were taking a toll on the business. It told them to expect improved bookings, narrower losses and a possible settlement with Alphabet Inc. that could resolve one of the company’s biggest legal hurdles.
On a conference call with investors, Uber executives said gross bookings increased more than 10% last quarter from the prior period, while losses continued to shrink, said people familiar with the meeting.
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Uber’s attorney told investors that a lawsuit over self-driving cars from Alphabet’s Waymo could be settled before a scheduled court date in October, though she said no formal agreement is in the works, said the people, who asked not to be identified because the information is private.
During the 15-minute call with backers, Uber didn’t release full financial results, saying those would be ready in the coming weeks. It was the first presentation to the privately held company’s shareholders since the resignation of chief executive officer Travis Kalanick, which was forced by several of Uber’s major investors last month.
“We’re fortunate to have a healthy and growing business, giving us the room to make the changes we know are needed on management and accountability, our culture and organization, and our relationship with drivers,” an Uber spokesman wrote in an email. He declined to comment on finances or plans for the Waymo suit.
In an email, a spokesman for Waymo wrote: “We believe we have strong evidence to put in front of a jury about Uber’s misappropriation of Waymo’s trade secrets and look forward to trial.”
Uber is continuing to take steps to squeeze more revenue from customers and reduce its expansive losses. Late last week, the company quietly increased booking fees in the US and Canada. The fee, which is designed to help Uber pay for insurance and other expenses, isn’t shared with drivers. Uber said the increase ranged from 15 cents to 50 cents per ride depending on the city. The fee accounts for about $1.50 to $3 of each fare.
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Tuesday’s meeting highlighted Uber’s shallow bench of leaders, which is the result of a months-long exodus from the San Francisco ride-hailing firm. The call was led by Ryan Graves, a longtime executive and board member, with participation from Angela Padilla, an associate general counsel, and Prabir Adarkar, Uber’s acting head of finance. Uber is looking to hire a CEO, general counsel and chief financial officer.
Padilla, who oversees Uber’s defence in the self-driving car lawsuit, drew parallels between Waymo’s suit and other cases that have been settled before they go to court, the people familiar with the matter said. Uber and Waymo are engaged in a court-mandated settlement conference. Following one such meeting, Waymo agreed to drop all but one of its patent claims.
A public fight could be painful for Uber and Waymo, as it could air private details about each company. The court has already ordered Waymo to provide the terms of its partnership agreement with Lyft Inc., something both companies resisted. Alphabet CEO Larry Page is scheduled to be deposed Monday and Kalanick is also expected to be questioned.
Adarkar, who took over the finance department after former head Gautam Gupta left for a start-up, only provided preliminary figures to investors. Gross bookings, which are the total of Uber’s fares before drivers take their cut, accelerated last quarter after a 9% increase in the previous quarter. Bookings surpassed $8.25 billion in the second quarter based on the estimate Uber provided to investors.
While Uber said losses will narrow, the company has a long way to go before reaching profitability. Uber’s loss before interest, taxes and stock-based compensation was $991 million in the last three months of 2016. The amount fell to $708 million in the first quarter. Spending has been driven by research into self-driving cars, expansion in Asia and aggressive hiring. Headcount has exploded to more than 15,000 employees.
Graves emphasized the steps that Uber is taking to improve its relationship with drivers, including introducing tipping into the US app. Graves offered investors few details on the ongoing CEO search, as the information is closely guarded. Graves said Uber’s 14-person executive leadership team is capable of running the business in the interim, particularly the three global heads of operations. Bloomberg