- Getty Images/Steve Jennings
- An early Uber investor and strategist says the company has lost its mojo.
- Bradley Tusk of Tusk Ventures told CNBC that some of the fierce innovative spirit departed Uber with its founder Travis Kalanick.
- There’s a lot of work to be done for Uber to be profitable, he said, but Lyft might be even more risky.
- Visit Business Insider’s homepage for more stories.
Uber has transitioned from nimble startup, to a global and publicly traded company – and in doing so, the ride-hailing giant has lost some of what made it special, according to an early investor and adviser.
“They’ve lost their mojo,” Bradley Tusk, the company’s first political strategist who invested in the company in 2011, told CNBC on Monday, as shares of the company plunged to a record low price. “I understand why they made that change, but clearly there’s not a lot of confidence int he leadership.”
CEO Dara Khosrowshahi told analysts on a conference call following the company’s second-quarter earnings report – in which it posted a massive $5.2 billion loss – that the company was continuing to innovate to become profitable, especially in shared rides.
“The big picture is we want to be there any way you want to get around your city and I think we’re well on a path to do so in a profitable way,” the former Expedia executive who joined Uber in 2017, said.
Tusk seems to agree with him on that aspect, but said there’s still plenty of work to be done.
“I now understand why they wanted to stay private for so long,” he said. “Fundamentally, for the company to be profitable, it can’t just be Uber Eats, it can’t just be ridesharing. They’ve got to be that agency of transportation. So whether you’re getting yourself from point-A to point-B on a bike, scooter, car, or bus; wether its furniture being shipped on a truck, or a burrito with a messenger, they’ve got to be the default for all of that to really reach profitability.”
Most Wall Street analysts agree too. Of the 35 polled by Bloomberg, 23 have the stock rated as a “buy.” Still, shares remains under water following the company’s IPO in May, and are 39% below analysts’ average price target of $51.61.
In June, Uber’s heads of marketing and operations departed the company, followed by two board members, including ally of ousted founder Travis Kalanick, Ariana Huffington, in July.
“I think at the very least some of what Travis represented in terms of innovation and change and intensity is lacking at the company now,’ Tusk continued. “There’s got to be some world where you can not have a culture of harassment and an uncomfortable work environment and yet still be able to innovate and compete.”
But don’t let his tone imply Lyft might be a better buy.
“Lyft obviously had a less bad quarter than Uber did and so the share reflected it,” he said. “But ultimately Lyft is a US-only ride-sharing business and i think it’s really hard to achieve a big vision at the kinda valuation they want to have because of that.”