Breakingviews: Travis Kalanick leaves Uber with no path to profit

Travis Kalanick is leaving Uber Technologies without a clear path to profit. The ride-hailing app’s co-founder and former chief executive is leaving the board after being sidelined and selling most of his shares, worth more than $2.5 billion. The $53 billion firm has also moved on from his tumultuous leadership that major investors brought to an end two and a half years ago. But his successor has yet to work out how to make money.

Kalanick has been playing a marginal role at the company for a while. He stepped down as chief executive in 2017 after an outcry over the company’s culture, including sexual-harassment allegations, and other scandals. Dara Khosrowshahi has been in the driving seat at Uber since then and steered the company to its initial public offering in May, for which Kalanick was relegated to the back seat.

Khosrowshahi has steadied the company since the Kalanick era, but still faces major financial obstacles. Uber’s stock has fallen by more than 30% since it went public. It reported a 31% revenue jump in the third quarter but lost some $1.2 billion, about a 20% increase from the same period in the previous year.

Uber’s sprawling business and hyper-competitive environment means it has been burning through a lot of cash. It combusted $2.5 billion in the first nine months of this year. Its food-delivery unit, Uber Eats, is growing fast but lost $316 million while keeping up with rivals and is still only the third-largest player in the United States, according to Second Measure.

Khosrowshahi has been making some tough decisions to stem the red ink, like pulling out of Uber Eats in South Korea. But he has yet to figure out the road map to get to a profitable bottom line. Kalanick may finally be gone from the company, but his legacy of losses endures.