Uber Might Make More Money This Year Selling Real Estate in Oakland Than Actually Selling Rides

A parable for our times.

Uber doesn’t need to be everywhere, it turns out.

Ted Aljibe/AFP/Getty Images

Uber looks like it’s on track to make more money selling a building it owns in Oakland, California, than it has selling rides over the last 10 months. In 2015, Uber bought the old Sears building in downtown Oakland with the intention of moving 3,000 of its employees to an expanded headquarters in the smaller, less–filthy-rich city just across the Bay from San Francisco, which the company currently calls home.

That never happened. And now Uber is selling its 380,000-square foot building to the CIM Group, a Los Angeles–based real estate investment firm, for $220 million, according to a report from the Registry, a website that covers Bay Area real estate deals. Uber bought the building in 2015 for $123.5 million, but after never moving in as planned, the company announced in August that it was considering putting the building up for sale.

Uber isn’t profitable. In August of this year the company shared that it had lost $645 million in its second quarter of 2017, which was actually a decrease from the $708 million it lost in the first quarter. Uber booked around $20 billion in rides in 2016 and, excluding its China subsidiary, which it sold in July last year, the company clocked in $6.5 billion in revenue. Still, Uber ultimately lost about $2.8 billion that year. (The company subsidizes rides.) All of which means that the roughly $96 million the company is pocketing off its Oakland property appears to be a far better return on investment than its main business, at least in the very short term.

To be clear, just because Uber is hemorrhaging money doesn’t mean it won’t one day turn a substantial profit. It remains, for one thing, in expansion mode. Amazon, after all, didn’t register meaningful profits for two decades and now the e-commerce empire is one of the most valuable companies in the world. Uber’s investors don’t seem to be too worried about its losses. In May, Jason Calacanis, an early Uber investor, congratulated the company for growing its sales while narrowing losses—again, in a quarter in which it lost more than half a billion dollars.

The reason Uber gave for leaving Oakland was that the company was looking to “strengthen our financial position,” which is probably a good idea considering the hell ride the company has been on for the past 12 months. That turbulence included forcing out its pugnacious founder Travis Kalanick as CEO, explosive allegations from a former Uber engineer Susan Fowler detailing a culture of widespread sexism and sexual harassment across the company, and a lawsuit from Google’s parent company Alphabet that could cost Uber more than $2 billion. Selling your empty real estate in Oakland may be the Bay Area startup unicorn equivalent of searching beneath your couch cushions for loose change. And Uber needs a lot of change right now.

While losing Uber might seem like a blow to any city eager to bring in new jobs and revitalize the economy, especially as more than 200 cities across the country recently scrambled to court Amazon’s new headquarters, at least some residents in Oakland are embracing the company’s reversal with a sigh of relief. Uber’s move to Oakland, some feared, would contribute to rising housing prices, gentrification, and displacement throughout the city.

“I’ve seen what they’ve done to Market Street in the city,” Oakland resident Nicky Bourque in told the East Bay Times back when Uber first announced plans to sell its real estate in August, referring to the impact of the tech boom on San Francisco, just across the Bay. “It’s become a lot less friendly.”

Yet Uber isn’t totally out of Oakland. For one, the ride hail company continues to operate in there, and second, the company reportedly plans to lease back a portion of the office space it’s selling.