Company has recorded years of losses in its bid to expand around the world
Uber chief executive sees profits for ride hailing company in three years
Uber Technologies, whose losses have piled up in the quest for growth around the world, will be profitable in three years as its ride-hailing business matures and the company reaps the rewards from investments in areas such as autonomous vehicles, its chief executive Dara Khosrowshahi said.
Bending the company’s financial trajectory out of the red would be a dramatic shift for the global ride-hailing service that loses billions of dollars a year. Speaking to Bloomberg at the World Economic Forum in Davos, Mr Khosrowshahi said that even as the company would continue to be aggressive about expansion, it’s finding ways to be more efficient.
While Mr Khosrowshahi didn’t give a specific time frame, he said "we’ll be profitable before 2022."
The core ride-sharing business can be profitable “within three years," he said, while also cautioning that "we will continue to make very aggressive investments."
During the third quarter, the company lost US$1.46 billion, up from $1.06bn during the previous three-month period.
Almost six months into his tenure leading Uber, Mr Khosrowshahi is attempting to reverse what has been an unprecedented time of turmoil. The company is facing various government investigations, allegations of sexual harassment and increasing competition from rivals around the world. Mr Khosrowshahi said his goal for 2018 is to "get back to normalcy" after the challenges left by former chief executive Travis Kalanick.
"Breakneck growth can hide cultural issues," he said.
Mr Khosrowshahi said the company was investing heavily in autonomous driving technology and that it would begin adding the cars in some cities within 18 months. The vehicles will at first only carry passengers on select routes, then it will expand over time as the software and mapping systems improve.
The company is also developing vehicles that will fly people to certain destinations within cities that Mr Khosrowshahi predicted will be available for customers within 10 years.
Mr Khosrowshahi has said he wants to take Uber public as early as next year, a process that would open the company’s financial performance up to more scrutiny. The company recently finalised a deal that makes the Japanese technology conglomerate SoftBank Group its largest shareholder.
Rajeev Misra, a SoftBank executive joining Uber’s board, suggested in a recent interview with the Financial Times that Uber focus on core markets such as the US, Europe, Latin America and Australia. In the interview at Davos, Mr Khosrowshahi disagreed, saying the company would be "leaning forward" to expand.
Since taking over as CEO last summer, Mr Khosrowshahi has been on a charm offensive to improve the company’s image. He said the company must work more closely with regulators rather than the more combative approach it took with Mr Kalanick.
The technology industry will face more scrutiny, especially as it brings about changes to transportation and other areas affecting people’s safety, Mr Khosrowshahi said. Regulation is "appropriate," he said.
The Uber CEO said he was originally more skeptical of driverless cars, but that he’s been won over. He predicted the technology is advancing so quickly that a child born today won’t need to learn to drive. He noted the general public still has to grapple with the impact of the technology, particularly when there are accidents. While he said traffic fatalities will fall, companies such as Uber will be held responsible when there are collisions.
Mr Khosrowshahi said he’s been working to change Uber’s boorish corporate culture. He commended former Uber engineer Susan Fowler, who wrote a blog post about the company’s sexist culture that led to an investigation at the company and a broader debate about the treatment of women in Silicon Valley and business. He called the fallout "difficult," but "one of the best things that happened at Uber" because of the changes it brought about.
Uber said Tuesday it hired Bo Young Lee as chief diversity and inclusion officer from insurance provider Marsh & McLennan, a move first reported by technology website Recode. At Davos, Mr Khosrowshahi said the company still has work to do to make its culture more welcoming for women.