I took an Uber home from a friend's place on Wednesday night, and out of habit I checked the fare before confirming, the way you do once you've been burned by surge pricing at least one time too many. Thursday morning the headline was Uber's first quarterly earnings report as a public company, and the loss was well north of a billion dollars. I sat there on the couch reading it and thought, yeah, that tracks.
For anyone who wasn't paying attention, Uber priced its IPO at $45 a share on May 10th. It's been a rough few weeks since. The stock opened below that price on day one and has mostly kept sliding, dipping into the high $30s more than once. So this earnings report wasn't exactly landing on fresh ground, it was more like confirming what the stock chart had already been saying for three weeks straight.
The number that got quoted everywhere was a net loss in the ballpark of a billion dollars for the quarter, driven partly by stock compensation tied to the IPO itself and partly by, well, the fact that Uber just spends a lot more than it makes. Revenue growth was also slower than people wanted to see, which is the part that actually spooked investors more than the raw loss figure. A company can lose money and still be fine if growth is roaring. Slowing growth plus a giant loss is a different story.
Dara Khosrowshahi's whole pitch on the call was the standard "we're investing in the future of transportation" line, and look, I get why he has to say that. Every ride-share and delivery company on earth is running the same playbook right now: burn cash, grab market share, worry about margins later. Lyft, which went public back in March, has been telling almost the identical story and its stock hasn't exactly been a rocket ship either. I just don't think "trust the long game" works as well the third or fourth time you say it in a row.
Here's my small complaint that has nothing to do with earnings calls: I still think surge pricing is one of the worst pieces of UX I deal with regularly. Not because dynamic pricing is inherently evil, I understand the supply-and-demand logic, but because the app shows you the multiplier for about two seconds before burying it, and I've had it silently jump between opening the app and confirming the ride more than once. If a company is going to ask me to trust its long-term vision, maybe start by not making the short-term pricing feel like a shell game. That's unrelated to quarterly losses, I know, but it's the thing that actually shapes how I feel about the company day to day, not a slide deck about total addressable market.
What strikes me watching all this from the outside is how little surprise there's been. Nobody I know who works anywhere near tech reacted to the loss number with shock. The reaction was closer to a shrug, maybe a "called it" in a Slack channel somewhere. Everyone already knew Uber wasn't profitable, that's not news, it's been public knowledge since roughly forever. What this earnings report actually did was put a specific, hard number on a thing people had been assuming in the abstract, and hard numbers land differently than vague awareness even when they're telling you the same story.
I don't own Uber stock and don't plan to, for what it's worth, though I'll keep using the app because the alternative around here is standing on a curb hoping a cab happens to drive by, which frankly it does not. There's something a little uncomfortable about being a daily user of a product whose entire business model I'm skeptical of as an investment. I use Gmail too and I'm not exactly thrilled about ad targeting either. Maybe that's just what using tech products in 2019 is, picking the convenient thing and quietly hoping the company figures out its math eventually.
Anyway. WWDC kicks off Monday and I'm sure I'll have opinions about that soon enough.