A new analysis of Uber’s financial data suggests the ride-hailing company is losing as much as $2 billion a year, with passengers on average only paying 41 percent of the actual cost of a trip.
Parsing a set of three private financial statements that were published on three separate occasions, Yves Smith of Naked Capitalism writes that its clear that for the year ending in September 2015, Uber posted $2 billion in losses on revenue of $1.4 billion.
“As shown in Exhibit 2, for the year ending September 2015, Uber had GAAP losses of $2 billion on revenue of $1.4 billion, a negative 143 percent profit margin. Thus Uber’s current operations depend on $2 billion in subsidies, funded out of the $13 billion in cash its investors have provided,” Smith writes. The data is in the chart below.
Perhaps more alarmingly, Smith writes, is that Uber’s passenger-based model, which is theoretically built to avoid overhead and reward drivers directly, actually pays for very little of the cost of each ride.
“Uber passengers were paying only 41 percent of the actual cost of their trips; Uber was using these massive subsidies to undercut the fares and provide more capacity than the competitors who had to cover 100 percent of their costs out of passenger fares.”
Smith arrived at the conclusion by looking at data for 2012, 2013 and the first half of 2014; tables of GAAP profit data for full year 2014 and the first half of 2015; and summary EBITDAR contribution data for the first half of 2016. More info
By Riley McDermid www.bizjournals.com
