To say there are problems with corporate America is a gross understatement. During a recent appearance on “Wall Street Week,” Mike Novogratz, president of $70 billion investment fund Fortress Investments, relayed an anecdote about a conversation he once had with Brent Callinicos, the former Chief Financial Officer of Uber (emphasis added).
Novogratz didn’t mention Callinicos by name, referring to him only as “Uber’s CFO.”
The meeting took place as Uber was raising money this past winter. Novogratz asked Callinicos how the company justified its $40 billion valuation. Callinicos walked Novogratz through the numbers.
According to Novogratz, Callinicos said that, right now, Uber drivers return between 20% and 25% of the fare they collect, but that in the future, Uber could easily raise that rate to between 25% and 30%. This would drastically improve Uber’s profit margin, Novogratz recalls Callinicos saying.
Novogratz said this answer prompted him to ask a “cheeky question.”
“‘You’ve got happy employees, you’ve got happy customers, you’ve got happy shareholders. The holy triumvirate are all really excited about your company. Why are you going to risk that and push the employees salary down 5%?'”
Callinicos simply responded “because we can.”