Uber may be the next Amazon — at least in terms of red ink.
Bloomberg reported Wednesday (July 1) that the ride-sharing startup, with spending that handily outpaces the revenue it gets from its core business, “is drawing fresh comparisons” with the eCommerce giant.
Citing information that the company is sharing with potential investors, Bloomberg said the company had an operating loss of $470 million on $415 million in revenue — and that covers an unspecified time period. An unidentified spokeswoman told Bloomberg that that data is “substantially old.”
As has been well-documented, Uber has been expanding at a heady pace, with an international focus as the service seeks to set down roots in major cities globally. The six-year-old company is valued at roughly $50 billion, and its app has been expanding to embrace offshoots of its key ride-sharing feature, such as the carpooling program known as uberPOOL. The company is also testing new services including food delivery. The company has been known for subsidizing rides in new markets it enters, an activity that of course takes money, as does the recruitment of drivers.
Such activities lead Uber to be mentioned in the same breath as Amazon, which has for years been known for spending heavily on key business infrastructure, such as data centers and warehouses. The company most recently has been pushing into areas including streaming media and growing its Prime business. At the turn of the millennium, the company was well-known for logging losses on high sales growth.
At the moment, though, Uber doesn’t face some of the pressures that Amazon did — simply because Uber is not publicly held and thus does not have to face criticism from investors.
“This is Amazon writ large,” said venture capitalist Nick Sturiale in an interview with Bloomberg. “It’s not just winning the current business; it’s probably teeing up future businesses.”
Meanwhile, Uber contends that its model is “Business 101,” as Nairi Hourdajian, an Uber spokeswoman, told Bloomberg. “You raise money, you invest money, you grow (hopefully), you make a profit and that generates a return for investors.”