Following their rival Lyft’s recent public offering, Uber’s much awaited IPO seems to be finally coming to pass. On Thursday, Uber filed their S-1 with the Securities and Exchange Commission (SEC), which outlines the details of their current operations, financial health, and planned use of offering funds. While a variety of other outlets have reported extensively on some of the details in the filing (such as the fun fact that a quarter of Uber’s revenue comes from only five cities), I thought it might be handy to build a few charts to more easily visualize some of the financial metrics being reported.
A quick note on part of my motivation for writing this: oftentimes in documents like the S-1, where companies are mandated to be truthful about the true risks and financial health of their companies by the SEC, the sections with important details will be buried in text, detailed tables, images, or other forms which make the data hard to easily ingest and understand. My hope is that extracting a lot of the detail from the filing’s tables and financial statements through a series of simple charts provides an easier way for anyone to understand the current state of Uber’s operations, without having the read the S-1 themselves!
Trips and Bookings
My main takeaways:
- Total bookings (reflective of paid revenue from Uber’s core products) has continue to grow each quarter at a brisk rate. Uber Eats has become an increasingly significant business in it’s own right, reaching nearly two and a half billion dollars of bookings in the last quarter of 2018
- While total volume is growing, Uber hasn’t really been able to increase the amount it makes on each trip (or delivery) - that bookings per trip number has remained fairly flat. Without any increases there, any financial growth for Uber is either coming from new user acquisition, or increased engagement per customer
- However, when we look at trips per monthly active consumer, there has been very little change over the past three years in user behavior. As such, keeping in mind our previous point, I think it’s fair to make the inference that most of Uber’s growth thus far has been from new user acquisition, rather than better unit economics or user engagement
- Roughly 45% of Uber’s overall trips are less than 3 miles, with over 20% being a mile or less - another factor that I think shows the potential size of the e-scooter or personal mobility market
Despite the brisk growth in trips and bookings, Uber’s overall Net Revenue flat-lined in 2018, primarily due to increased cost of revenue and an overall shift in user demand for lower cost services such as UberPool and Express Pool, cannibalizing some of the companies higher-margin products such as UberX, XL, and Black. Increased driver costs and regulation surrounding driver compensation has also made a major financial impact on Uber’s business, and helped push the company’s Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) more sharply negative on a quarterly basis to close out 2018. At current rates, Uber is losing around $2 billion a year before taking the other costs into account. On the positive side, Uber was able to squeak out a strong contribution margin from its core business in early 2018, indicating that the unit economics of the business can be workable in the right conditions.