Uber has abandoned plans to move into a massive building in Oakland, California and is instead “exploring several options” for the site, including a sale.
The company had planned to turn Uptown Station, a 380,000-square foot building which formerly housed a Sears department store, into its new California headquarters. Uber’s more modest current headquarters are located on San Francisco’s Market Street.
But Business Insider understands the change of plan is because Uber needs to cut its losses and hit profitability. The company remains hugely unprofitable and is dealing with board-level squabbles over who should be its new CEO, and how to raise future funds.
A spokeswoman told Business Insider: “As we look to strengthen our financial position so we can better serve riders and drivers for the long term, we’re exploring several options for Uptown Station, including a sale. We remain committed to serving Oakland and our broader hometown Bay Area community.”
We first saw the news on The San Francisco Business Times, which reported a price tag of $US123.5 million (£96 million) — the same price Uber originally paid.
Rather than having two buildings, Uber will reportedly consolidate its headquarters into a new facility somewhere else in San Francisco.
The ride-hailing firm first announced the Oakland expansion in 2015, promising space for 2,000 to 3,000 employees. But it curtailed its plans in March this year, saying it would downsize to just a few hundred employees in Oakland, though it didn’t explain why. The plan then was to lease about half the new office space.
It’s not just a disappointment for Uber. Oakland is linked to San Francisco via the Bay Bridge and is seen as its more downmarket, poorer sister. Uber’s move was described by Oakland mayor Libby Schaaf as a “game changer” for the city.
The company reported a $US645 million (£503 million) loss on Wednesday for the second quarter — lower than previous quarters — on gross ride bookings of $US8.7 billion (£6.7 billion).