Uber says it will consider accepting bitcoin as payment after losing $6.8 BILLION last year - up from an $8.5B loss in 2019
Uber will consider accepting Bitcoin as payment, its CEO said Thursday, a day after the company posted 2020 losses of $6.8 billion.
Dara Khosrowshahi told CNBC Thursday that the ride-hailing company had discussed and 'quickly dismissed' the idea of investing in bitcoin. He said: 'We're going to keep our cash safe. We're not in the speculation business.'
But he said the company would be open to accepting bitcoin as payment, adding: 'Just like we accept all kinds of local currencies we are going to look at cryptocurrency and/or bitcoin in terms of a currency to transact.
'If there's there a benefit there, if there's a need we're going to do it.'
Elon Musk's Tesla has already announced it will start accepting the cryptocurrency as payment for its cars in the near future. Twitter said Wednesday it has thought about whether to hold bitcoin on its balance sheet.
As a result shares in Bitcoin surged to a record high Tuesday, approaching the $50,000 mark. As of Thursday one bitcoin was worth $46,967.70.
Uber reported losing $6.8 billion last year - but that's down on $8.5 billion it lost in 2019 and the app says it hopes to be profitable by the end of this year. CFO Nelson Chai said they remain 'well on track to achieving our profitability goals in 2021.'
Dara Khosrowshahi told CNBC Thursday that the ride-hailing company had discussed and 'quickly dismissed' the idea of investing in bitcoin but said the company will consider accepting Bitcoin as payment
The company has been forced to rely more heavily on its food-delivery business after the pandemic dramatically reduced the number of people willing to hop into a car driven by a stranger.
Those efforts, which included a $2.65 billion acquisition of Postmates last year, have enabled the food-delivery service to bring in nearly as much revenue Uber's ride-hailing business.
Uber is poised to expand even further beyond transporting people with its recent $1.1 billion deal for alcohol delivery service Drizly.
But analysts believe Uber's pioneering ride-hailing service will also eventually bounce back as more people are vaccinated against COVID-19.
Uber reported losing $6.8 billion last year - but that's down on $8.5 billion it lost in 2019 and the app says it hopes to be profitable by the end of this year. CFO Nelson Chai said they remain 'well on track to achieving our profitability goals in 2021'
Uber's shares dipped by about 3% in Wednesday's extended trading after the quarterly numbers came out. They closed down nearly 4% Thursday
Those predictions, coupled with the success of the food-delivery expansion, is the main reason Uber's stock price has recently been hovering at its all-time high, more than quadrupling from its lows reached nearly 11 months ago during the early stages of the pandemic.
Uber's shares dipped by about 3% in Wednesday's extended trading after the quarterly numbers came out. They closed down nearly 4% Thursday.
'We're cautiously optimistic that this progress will continue and, in fact, accelerate over the next quarters,' Khosrowshahi told analysts in a conference call. He also predicted that Uber's losses may evaporate by the end of this year.
In a research note, Wedbush Securites analyst Daniel Ives touted Uber as 'a poster child' for a post-pandemic comeback.
Uber lost $968 million, or 54 cents per share, in the October-December period, narrowing from a loss of nearly $1.1 billion, or 64 cents per share, at the same time in the prior year. The latest loss also marked an improvement from the quarters earlier in the pandemic.
Revenue for the past quarter decreased 16% from the previous year to $3.17 billion.
'We're cautiously optimistic that this progress will continue and, in fact, accelerate over the next quarters,' Khosrowshahi, pictured Thursday, told analysts in a conference call. He also predicted that Uber's losses may evaporate by the end of this year
Elon Musk's Tesla has already announced it will start accepting the cryptocurrency as payment for its cars in the near future. Twitter said Wednesday it has thought about whether to hold bitcoin on its balance sheet
The company's ride-hailing service brought in revenue of $1.48 billion in the quarter, a 52% drop from the prior year. Meanwhile, revenue in Uber's food-delivery service more than tripled from the previous year to $1.37 billion.
Uber probably would have been in an even deeper hole if it hadn't been able to join forces with rival Lyft and a few other mobile app services to win an exemption from a California law that would have required it to classify its drivers in its biggest markets as full-fledged employees with a wide range of costly benefits, instead of as independent contractors.
To gain the exemption from the California law, Uber and its allies spent more than $200 million on a ballot measure that passed with 58% approval in November.
The California Supreme Court refused to hear a legal challenge to the ballot measure earlier this month.
Uber cut costs throughout 2020, including reducing staff by nearly 30% from the beginning of the year.
It reported $3.17 billion in total revenue in the months from October through December.
Fourth-quarter mobility revenue, largely comprised of rides, declined by 52% from last year, but at $1.47 billion was up 8% on a quarterly basis despite new lockdown measures in the United States, Europe and the Middle East.
The company has been forced to rely more heavily on its food-delivery business after the pandemic dramatically reduced the number of people willing to hop into a car driven by a stranger. Those efforts, which included a $2.65 billion acquisition of Postmates, have enabled the food-delivery service to bring in nearly as much revenue Uber's ride-hailing business
The company said it could not predict the quarter in which ride-hail volumes might return to pre-pandemic levels. Airport travel, which made up 15% of gross bookings before the pandemic, will take longer to return than leisure and business trips, Uber said.
It expected first-quarter adjusted EBITDA to be flat or down compared with the fourth quarter.
Following a directive by Khosrowshahi to focus on the company's core businesses, Uber has sold two cash-burning units.
The company in December sold its self-driving Advanced Technologies Group (ATG) in a $4 billion equity deal at a steep drop in valuation. Khosrowshahi at the time said the deal would accelerate Uber's profitability goal.
The same month, Uber also handed over the keys to its air taxi business Elevate, without disclosing the terms of the deal.
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