Uber is worth $50 billion, according to the latest valuation on Wall Street. But there are now new questions about whether the company's revenue and potential for profit after internal financial documents were leaked to Gawker. The docs reveal that Uber has lost hundreds of millions of dollars over the last few years. On top of that, CEO Travis Kalanick may have been exaggerating about how much Uber's revenue has grown. His claims of an exponentially expanding revenue stream were, according to Gawker, "wildly overblown."
The truth of the matter is hard to glean, though, if you're just going off what Gawker has released. For one, the documents don't have all the numbers you'd need to resolve the question of Uber's real revenue. The net revenue figure looks very bad—$57 million brought in and $164 million spent just in the second quarter of 2014, a nearly $110 million loss. But it's not easy to make a blanket statement about Uber's financials without the gross revenue figure, the money that goes to drivers and to Uber's expenses. That could make up around four-fifths or so of the total revenue, according to an estimate in New York. If that multiplier is included, the quarter's revenue was $285 million and that $110 million loss comes from operating costs of about $395 million. Bigger numbers mean the loss is much less of a problem and is easily explained by Uber's willingness to sacrifice profit for now in order to grow as rapidly as possible.
There's no way to know for certain even with the leaked documents whether Kalanick's boasts are accurate or pure wishful thinking designed to keep the investor dollars coming in. It's hard to believe that so many big-time investors would be so eager to give Uber so much money without having access to enough of Uber's financial records to decide whether the revenue is real or not. Their excited lobbing of dollars in Uber's direction suggests that the revenue losses are not nearly as serious as the Gawker documents imply, especially if things have improved since last year. Whether the leak will have any impact on Uber's valuation and its seemingly inevitable IPO is the next unanswered question.