Like many a rapidly growing private company, Uber can be somewhat secretive (discreet, if you prefer) with its financial performance. Thankfully for the more curious among us, any registered company in the UK has to file accounts with Companies House, allowing us an annual glimpse into its private affairs. As sneaky glances go, this one’s quite revealing.
Uber’s UK subsidiary seems to have found the start-up Holy Grail: profits and rapid growth at the same time. The firm turned over £11.3m in 2014, more than ten times what it did in 2013, while its £336,000 pre-tax loss magically transformed into an £888,000 profit.
This swift u-turn shows nicely why Uber’s got investors from Google to Goldman Sachs salivating into their cheque books. This business has the potential to disrupt or cannibalise the whole world’s taxi market, but doesn’t require forever to become profitable (Amazon, anyone?).
Its business model of licensing independent drivers means it gets its cut without having to pay for cars or serious physical infrastructure, so its loss-making expansion phase in any new market is fairly short. The mothership in San Francisco may be running a loss (from what we know), but that’s because it’s betting the farm on capturing the Chinese market and in driverless cars. Once the business is mature, its fundamentals are sound.
Uber doesn’t exactly have an open road ahead of it, however, either here or abroad. While in China it wrestles with Didi Kuaidi and in France it’s fighting for its legal right to exist, the problem here the long arm of the regulators - and lobbying from cabbies.
The Licensed Taxi Drivers Association, which considers Uber to be an unfair form of competition, may have failed to have Uber’s app ruled an illegal minicab meter last week, but its appeal to the Supreme Court could yet be successful.
Just as ominously, TfL’s proposed new regulations on booking cars (apparently it’s in Londoners’ interests to have a minimum wait time) and a possible cap on the number of private cars in the city could undermine the firm’s competitive advantage. Still, with its expansion outside of the capital and with the rate people are ditching metered cabs for Uber cars wherever they are to be found, it would be surprising if its growth this year wasn’t just as impressive.