In a recent interview with CNN’s Christiane Amanpour, Uber CEO Dara Khosrowshahi maintains that Uber’s business model “is absolutely sustainable” — despite losing $5 billion in the last three months.
According to Khosrowshahi, Uber is growing by about 30% in the global market. It continues to attract customers to its meal delivery and ride-hailing services as the company invests heavily in promotions.
Last year, Uber has 3.9 million drivers and 91 million active users. In the U.S. alone, the company provides about 40 million rides per month. Across the globe, Uber drivers complete 15 million rides daily. Approximately 50,000 rideshare drivers sign up with the company monthly.
Initial Public Offering
We all know what happened when Uber went public last May. Although their IPO may be disappointing, Uber managed to have one of the biggest public offerings in history. Not to mention, they’ve established a $75 billion valuation.
After going public, Uber’s stock dropped a staggering 30%. They had their biggest loss in June when the company lost $5.2 billion. Furthermore, the measly 2% increase the company managed to acquire in the second quarter isn’t giving investors anything to look forward to.
Uber is facing unique challenges and it seems they are trying to control fires from all sides.
With AB5 on the horizon, Uber’s business model for rideshare drivers could change. It could increase Uber’s driver cost in California and potentially in other states. For a company that has been trying to cut costs for months by laying off workers worldwide and shutting down some services, additional costs are definitely bad news.
Dara Khosrowshahi, Uber CEO, says:
The law, of course applies, But We don’t think that the law, as it relates to us, would classify our drivers as full-time workers.
Despite the company’s stand on the classification of their drivers, Uber CEO Dara Khosrowshahi agrees, “the nature of independent work should change.”
Furthermore, Uber believes that drivers “should have minimum earnings and get health care.
The question needs to be asked, however, with their loses and cutbacks for the past months, it’s hard to imagine how Uber will manage to provide better benefits to their drivers.