Uber faces an investigation of sexism, allegations of intellectual property theft, and accusations of evading authorities — but one investor said he is still betting on them through the “hiccups.”
“We’ve been investing in technology companies like Uber for 15 years,” Brad Gerstner, founder of Altimeter Capital, told CNBC’s “Fast Money: Halftime Report” on Monday. “And when I look over that history, there’s always volatility in high-growth companies, and it’s hard for management to scale these companies without hiccups.”
The ride-hailing start-up has faced an unrelenting litany of scandals since the beginning of the year. A former employee published a viral blog post about her experiences of sexism within the company, launching an internal investigation. Alphabet’s self-driving car unit, Waymo, is accusing their former employee of taking crucial designs over to Uber. And now, an Uber technology called “greyballing” has reportedly caught the eye of the Justice Department.
But Gerstner said the endowments and family offices that invest in Altimeter are looking for long-term investments — the “signal” through the noise.
“Uber, not withstanding all the noise — tens of billions of dollars of revenue, growing incredibly fast,” Gerstner said. “If I’m on the short side of anything, I’m on the short side of all the global transportation industry, like taxis, who are trying to compete with Uber.”
Gerstner said he’s not diminishing the issues by calling them “noise.” He’s also an investor in United, which has faced its own public backlash after a customer was dragged off a flight. Gerstner has said he was “disgusted” by that incident.
“Companies face issues,” Gerstner said. “These are hard businesses. You have hundreds of millions of passengers on an annual basis. Stuff’s going to go wrong. I think [CEO] Travis [Kalanick] raised his hand, said ‘I missed the mark on culture, I’m putting the people on the board that are going to help me fix this problem.” And again, I think sooner than later you’re going to see team adjustments at Uber that are going to add to the mix. But I have all the confidence in the world that Uber is going to continue to disrupt.”
Gerstner said that he thinks Uber, as well as another of his big investments, Airbnb, will “absolutely” go public.
“The surprise will be how quickly they do, not how long it takes,” Gerstner said.
The company may be helped by consolidation in the self-driving space, he said in the interview, from the Sohn Conference.
“They are a dominant, global brand …. with a really smart team. I’m betting on them,” Gerstner said.
Source: CNBC
