One of Uber’s earliest backers told us why he’s bullish on the company, even though ‘they’re still finding a few skeletons’

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  • From boycotts to hacks to lawsuits, 2017 has been a rough year for Uber.
  • But early backer and former board member Bill Gurley still think there’s a case for it.
  • Gurley argues that the bull case hasn’t changed.

Bill Gurley, a general partner at Benchmark Capital and early investor in Uber, still has faith in the company.

Uber’s had a bumpy 2017, including lawsuits, boycotts, hacks, changes in leadership, and seemingly scandal after scandal. In the past quarter alone, the company lost $1.5 billion.And on Wednesday, Europe’s top court ruled that Uber was a transport service, which could impose more regulations on the company. Gurley stepped down from Uber’s board in June, and Benchmark later sued Uber’s former CEO Travis Kalanick.

Even so, Gurley remains bullish on Uber’s future. Here’s how he explains it:

“We built America for cars. And we probably went way too far. There are 3.2 cars per household, and in Houston there’s five parking spots for every car. If you go on Google Earth and you look at a city, we’ve done remarkably crazy things so that we can all have tons of these cars. They are expensive, they depreciate like crazy. They’re one of the most expensive assets poor people have to buy. And one of the reasons poor people have to buy them is because you can’t get around our cities and towns without them because we’ve spread the towns out so much so we can have five parking spots. It’s a self-fulfilling problem.”

But that could be changing, if the regulations that require parking at places like a restaurant start to go away.

“In the past year, Uber’s worked with a number of developers to petition different local governments about building lower cost housing without parking spots. They’ve been able to do some of these things,” Gurley said. “I literally believe we’re moving from a place where that 3.2 number was peak and it’s going to start going down. And that’s remarkably transformational on how everything’s built and designed.”

At the same time, owning a car, or even getting a driver’s license as soon as your turn 16, are two rites of passage that haven’t been a staple to as many young adults in the past few years as they were a few decades ago.

“There’s an indifference to car ownership where it used to be this American birthright. That’s big. It couldn’t be a bigger market,” Gurley said.

While the company had to fix some things, Gurley said he’s a “big fan” of new Uber CEO Dara Khosrowshahi, and liked that the company hired Tony West as general counsel. He also pointed to the success of UberEats and other new endeavors as reasons to be excited. On Wednesday, the company named Barney Harford, the former CEO of online travel site Orbitz, as chief operating officer.

“They’re still finding a few skeletons. Hopefully we’ll get past them all,” he said.