Uber CEO Dara Khosrowshahi told CNBC on Thursday that the company discussed, but “quickly rejected” the idea of buying bitcoin with corporate money like Telsa.
However, Khosrowshahi said that Uber would consider accepting cryptocurrencies as a form of payment.
The comments came after Tesla announced earlier this week that it bought $ 1.5 billion in bitcoins with some money on its 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 whether the electric vehicle manufacturer’s decision would be a tipping point for adopting cryptography.
In an interview in the “Squawk Box”, Khosrowshahi was asked if Uber had considered actions similar to Tesla. “It’s a conversation that happened and was quickly dismissed,” he said. “We are going to keep our money safe. We are not in the speculation business,” he emphasized. “The advantage of our company is in the business we build, not in the investments we invest in.”
On December 31, Uber reported that it had $ 5.65 billion in cash and cash equivalents, along with $ 1.18 billion in short-term investments.
Khosrowshahi, who took over as chief executive of Uber in 2017, left open the possibility that the food and ride delivery provider would accept cryptocurrencies as payment.
“Just as we accept all types of local currency, we will look at cryptocurrency and / or bitcoin in terms of currency for transactions,” he said. “This is good for business. This is good for our passengers and eaters. We will certainly see that, and if there is a benefit to it, if there is a need, we will do it. We simply will not do it 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 said will allow consumers and merchants to “make transactions in an entirely new form of payment”. Mastercard had previously allowed customers to make some transactions with cryptocurrencies, but they took place outside the company’s formal network.
The last financial firm to put its weight on cryptography is BNY Mellon, which announced Thursday that it is launching a digital assets division later this year. Shares in America’s oldest bank rose Thursday.
Supporters of companies that buy bitcoin for their corporate money argue that, despite its daily volatility, the digital currency has appreciated in the long run and will continue to increase. For that reason, supporters like MicroStrategy CEO Michael Saylor feel that it is a more productive investment than keeping a lot of money on the balance sheet.
Some skeptics worry about the volatility risks of bitcoin, which has had a big run in recent months to trade above $ 48,000 per currency at historic highs on Thursday morning. A year ago, bitcoin was trading below $ 11,000. Although bitcoin has seen an increase in institutional adoption recently, some still believe that there is still a lot of uncertainty about its future.
Like Uber, PepsiCo CFO Hugh Johnston told CNBC on Thursday that the beverage giant “talked” about buying bitcoin with its money. “The conclusion we came to very quickly was that bitcoin is very speculative in the way we manage our cash portfolio,” Johnston said earlier in the “Squawk Box”, shortly after the company announced better-than-expected earnings and revenues. PepsiCo reported a fourth-quarter earnings of $ 1.47 per share on revenue of $ 22.46 billion. Stocks fell Thursday.
As for Uber, its shares fell on Thursday, after the mixed results of the company’s fourth quarter earnings. The shares advanced 6% during Wednesday’s session towards the after-the-bell report. Uber said it lost 54 cents a share in the fourth quarter, slightly less than analysts’ expectations of a loss of 56 cents. The $ 3.17 billion revenue was below the $ 3.58 billion Wall Street expected. The company’s overall loss in the quarter was $ 968 million, an improvement over the loss of $ 1.1 billion in the same period last year.
Uber’s two biggest business offerings – hitchhiking and food delivery – had different destinations during the coronavirus pandemic. The ride segment suffered because people stayed at home and traveled less. On the other hand, Uber Eats saw its usage increase as people ordered delivery instead of dining in restaurants.