Uber CEO Dara Khosrowshahi told CNBC on Thursday that the company discussed but “quickly dismissed” the idea of buying bitcoin with corporate cash like Telsa.
However, Khosrowshahi said Uber would consider accepting cryptocurrencies as payment.
The comments come after Tesla announced earlier this week that it bought Bitcoin worth $ 1.5 billion with some cash on the balance sheet and plans to start accepting digital currency as payment for its products. Tesla’s moves caught the attention of Wall Street and some wondered if the electric vehicle maker’s decision would be a turning point for a new adoption of cryptography.
In an interview with “Squawk Box,” Khosrowshahi was asked if Uber had considered similar actions to Tesla. “It’s a conversation that has happened quickly,” he said. “We will keep our cash safe. We are not in the business of speculation,” he stressed. “The advantage of our company is the business we have built, not the investments we invest in.”
As of December 31, Uber reported that it had $ 5.655 billion in cash and cash equivalents, along with $ 1.188 billion in short-term investments.
Khosrowshahi, who took over as CEO of Uber in 2017, left open the possibility for the delivery and food service provider to accept cryptocurrencies as payment.
“Just as we accept all types of local currency, we will analyze cryptocurrency and / or bitcoin in terms of currency to trade,” he said. “This is good for business. This is good for our pilots and for our dining rooms. We will definitely look at it and if there is any advantage, if there is a need, we will. We just won’t. As part of ‘a promotion’.
On Wednesday, Mastercard announced its intention to open its network to some cryptocurrencies, a move that the credit card giant allowed consumers and merchants to “trade with a completely new form of payment.” Mastercard had already allowed customers to make some transactions with cryptocurrencies, but they took place outside the company’s formal network.
The latest financial company to put its weight behind cryptography is BNY Mellon, which said Thursday it will launch a digital asset division later this year. Shares of America’s oldest bank rose Thursday.
Proponents of companies buying bitcoin for their corporate cash argue that despite its day-to-day volatility, digital currency has appreciated its long-term value and will continue to do so. For this reason, supporters like MicroStrategy CEO Michael Saylor consider it a more productive investment than keeping hordes of cash on the balance sheet.
Some skeptics worry about the risks of bitcoin volatility, which has enjoyed a massive run in recent months to trade above $ 48,000 per coin at record highs Thursday morning. A year ago, bitcoin was trading below $ 11,000. Although Bitcoin has seen increasing institutional adoption lately, some believe there is still too much uncertainty about its future.
Like Uber, Hugh Johnston, chief financial officer of PepsiCo, told CNBC on Thursday that the beverage giant “has kept the conversation going” about buying bitcoins with its cash. “The conclusion we came to pretty quickly was that bitcoin is too speculative for the way we manage our cash portfolio,” Johnston said earlier in “Squawk Box,” shortly after the company reported revenue and better-than-expected gains. PepsiCo reported fourth-quarter earnings of $ 1.47 per share on revenue of $ 22.46 million. Shares fell on Thursday.
As for Uber, its shares fell on Thursday after the company’s fourth-quarter mixed earnings performance. Shares advanced 6% during Wednesday’s session toward the post-bell report. Uber said it lost 54 cents a share in the fourth quarter, slightly lower than analysts ’expectations for a 56-cent loss. Revenue of $ 3.17 billion was below the $ 3.58 million Wall Street had been looking for. The company’s overall loss for the quarter was $ 968 million, an improvement over the $ 1.1 billion loss in the same period last year.
Uber’s two major commercial companies, the high-performance and food delivery companies, have seen different destinations during the coronavirus pandemic. The travel segment has suffered as people stayed home and traveled less. By contrast, Uber Eats has seen its use increase as people asked for delivery instead of eating at restaurants.