Uber CEO Dara Khosrowshahi told CNBC on Thursday that the company quickly “rejected” the idea of buying bitcoin with a 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 had bought $ 1.5 billion worth of bitcoin with some cash on its balance sheet and planned to accept the digital currency as payment for its products. Tesla’s moves caught Wall Street’s attention and some wondered if the electric vehicle’s manufacturer’s decision would be a turning point for further adoption of cryptocurrencies.
In an interview on Squawk Box, Khosrowshahi was asked if Uber had considered similar actions to Tesla. “It’s a conversation that was quickly turned down,” he said. “We are going to keep our cash safe. We are not speculating,” he stressed. “The advantage in our company is the business we have built up, not the investments in which we invest.”
Uber reported on December 31 that it had $ 5.65 billion in cash and cash equivalents, as well as $ 1.18 billion in short-term investments.
Khosrowshahi, who took over as Uber’s CEO in 2017, has opened up the possibility that the provider of driving and food delivery would accept cryptocurrencies as payment.
“Just as we accept all types of local currencies, we are going to look at crypto-currency and / or bitcoin in terms of currency to trade,” he said. “It’s good for business. It’s good for our riders and our eaters. We’ll definitely look at that and if there’s an advantage, if there’s a need, we’ll do it. We’re just not going to do it. as part of a promotion. “
On Wednesday, Mastercard announced plans to open its network to some cryptocurrencies, a move that, according to the credit card giant, will enable consumers and merchants to make a whole new form of payment. Mastercard has already had customers do a few transactions with cryptocurrencies, but this has taken place outside the company’s formal network.
The latest financial firm to put its weight behind crypto is BNY Mellon, which said on Thursday it would launch a digital assets division later this year. Shares of the oldest bank in America rose on Thursday.
Proponents of companies buying bitcoin for their corporate cash argue that the digital currency has appreciated in the long run despite its daily volatility and will continue to do so. For this reason, fans like MicroStrategy CEO Michael Saylor feel it’s a more productive investment than keeping hordes of cash on balance.
Some skeptics are concerned about the volatility risks of bitcoin, which has had a tremendous run over the past few months, trading more than $ 48,000 per currency on Thursday morning. A year ago, bitcoin traded less than $ 11,000. While bitcoin has had increased institutional adoption recently, some still believe that there is still too much uncertainty about its future.
Like Uber, PepsiCo chief financial officer Hugh Johnston told CNBC on Thursday that the liquor giant “had the conversation” about buying bitcoin 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 on ‘Squawk Box’, shortly after the company reported better-than-expected revenue and earnings. PepsiCo reported earnings of $ 1.47 per share in the fourth quarter on revenue of $ 22.46 billion. Shares fell Thursday.
As for Uber, its shares fell Thursday after the mixed results of the company’s fourth quarter. The stock rose 6% during Wednesday’s session after the report after the clock. Uber said it lost 54 cents a share in the fourth quarter, slightly narrower than the analyst had expected for a 56-cent loss. Revenue of $ 3.17 billion was less than the $ 3.58 billion sought by Wall Street. The company’s total loss for the quarter was $ 968 million, an improvement from the $ 1.1 billion loss in the same period last year.
Uber’s two biggest offerings – driving assistance and food delivery – saw different fates during the coronavirus pandemic. The segment for the driving call suffered because people stayed at home and traveled less. Conversely, Uber Eats saw its use increase as people ordered deliveries instead of eating in restaurants.