As of 2022, on net revenues of $31.87 billion, Uber posted a net loss of $9.14 billion. In 2021, Uber posted a lower net loss ($496 million), primarily thanks to the business divestitures of various assets. Throughout its history, on an annual basis, Uber has never made a profit. Yet, it has also shown incredible businessgrowth, over the years, with its revenue at $3.8 billion in 2016, to almost $32 billion in 2022.
Uber reported over $9 billion in net losses in 2022, compared to just $496 million in net losses in 2021 (primarily thanks to some business divestitures) and over $6.7 billion in net losses in 2020.
Understanding Uber’s financials
Over the years, Uber has created a whole new market, starting from its mobility/ride-sharing platform.
Uber is a is two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner, and a customer with the Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay small delivery charges, and at times, cancellation fees; Drivers earn through making reliable deliveries on time.
As of 2022, Uber is confirmed to be a behemoth in the mobility industry, spanning anywhere from ride-sharing to food delivery, and freight delivery.
Uber’s mobility platform generated $14 billion in 2022, followed by the delivery platform (Uber Eats), with $10.9 billion in revenue, and the freight platform, with $6.95 billion in revenue. The mobility platform still represents the core business model of Uber, and it has accelerated again after the end of the Covid-19 pandemic. On the other hand, thanks to the company restructuring in the last few years, Uber has built two multi-billion dollar segments from delivery and freight, on top of the core platform.
The fee or take rate might vary based on geography, supply, and demand, but also the ability of Uber to have consolidated market shares.
Uber fees, or take rates, can vary between 20% and 30%. For instance, in 2022, Uber took from drivers around 28% in fees through its ride-sharing platform. At the same time, it took around 20% of riders through its delivery platform (Uber Eats).
Indeed, as of 2022, take rates are higher in the ride-sharing industry, where Uber has a more consolidated, dominating position.
In 2022, Uber mobility took 27% of each booking on the platform. At the same time, Uber Eats took 20% of each booking on the delivery platform. The take rate varies according to demand and supply but also market dynamics. In short, in periods of increased competition, the service might charge lower take rates to keep up with it. In 2022, Uber pushed on efficiency, thus raising its take rates, to move toward profitability.
Whereas, in the delivery business, where competition is intense, and Uber hasn’t yet consolidated market dominance, its take rates are slightly lower.
As the financial crisis hit the world in 2022, Uber had to further re-focus its business units, thus performing various divestitures.
However, the company is still highly unprofitable.
Yet, the good news is if we look at the Uber Eats segment, this might be getting profitable (if we look at EBITDA).
For the first time since its inception, Uber Eats’ EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) – which measures a company’s operational efficiency – was positive for $551 million, compared to negative $348 million in 2021; negative $870 million in negative EBIDTA in 2020; and over $1.3 billion negative EBIDTA in 2019.
And the same applies to the Uber Freight segment, which might have broken even by 2022.
The Uber Freight segment reached break-even in 2022 when it moved from a negative EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to a natural one. Compared to $130 million in negative EBITDA in 2021 and a negative EBITDA of $227 million in 2020.
Uber is a two-sided marketplace, a platform business model that connects drivers and riders, with an interface with gamification elements that make it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.
As of 2022, on net revenues of $31.87 billion, Uber posted a net loss of $9.14 billion. In 2021, Uber posted a lower net loss ($496 million), primary thanks to the business divestitures of various assets. Throughout its history, on an annual basis, Uber has never made a profit. Yet, it has also shown incredible businessgrowth, over the years, with its revenue at $3.8 billion in 2016, to almost $32 billion in 2022.
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner, and a customer with the Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay small delivery charges, and at times, cancellation fees; Drivers earn through making reliable deliveries on time.
For the first time since its inception, Uber Eats’ EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) – which measures a company’s operational efficiency – was positive for $551 million, compared to negative $348 million in 2021; negative $870 million in negative EBIDTA in 2020; and over $1.3 billion negative EBIDTA in 2019.
Uber Freight has grown from a $1 billion segment in 2020 to almost $7 billion in revenue in 2022, representing nearly 22% of Uber’s total revenue in the same year.
In 2022, Uber generated $14 billion from its core platform (mobility), followed by $10.9 billion from the delivery platform (Uber Eats) and $6.95 billion from the freight platform. The company generates most of its revenue in North America.
In 2022 Uber launched its advertising segment, which comprises revenue from sponsored listing fees paid by merchants and brands in exchange for advertising on the platform. By the end of the year, Uber advertising had generated $500 million in revenue from 315K merchants.
Lyft is a transportation-as-a-service marketplace allowing riders to find a driver for a ride. Lyft has also expanded with a multimodal platform that gives more options like bike-sharing or electric scooters. Lyft primary makes money by collecting fees from drivers that complete rides on the platform.
Lyft is not profitable. The company reported a net loss of $1.58 billion in 2022, compared to a net loss of a billion in 2021. In 2022, Lyft reported revenue of $4 billion, compared to $3.2 billion in 2021.
In the food delivery business model companies leverage technology to build platforms that enable users to have the food delivered at home. This business model usually is set up as a platform and multi-sided marketplace, where the food delivery company makes money by charging commissions to the restaurant and to the customer.
DoorDash is a platform business model that enables restaurants to set up no-cost delivery operations. At the same time, customers get their food at home, and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.
Glovo is a Spanish on-demand courier service that purchases and delivers products ordered through a mobile app. Founded in 2015 by Oscar Pierre and Sacha Michaud as a way to “uberize” local services. Glovo makes money via delivery fees, mini-supermarkets (fulfillment centers that Glovo operates in partnership with grocery store chains), and dark kitchens (enabling restaurants to increase their capacity).
Instacart’s business model relies on enabling an easy set up for grocery stores, the comfort for customers to get their shopping delivered at home, and an additional income stream for personal shoppers. Instacart makes money by charging service fees, via memberships, and by running performance advertising on its platform.
Grubhub is an online and mobile platform for restaurant pick-up and delivery orders. In 2018 the company connected 95,000 takeout restaurants in over 1,700 U.S. cities and London. The Grubhub portfolio of brands like Seamless, LevelUp, Eat24, AllMenus, MenuPages, andTapingo. The company makes money primarily by charging restaurants a pre-order commission and it generates revenues when diners place an order on its platform. Also, it charges restaurants that use Grubhub delivery services and when diners pay for those services.
Shipt is a North American integrated delivery service for groceries, home products, and electronics initially funded by Bill Smith, a highly experienced entrepreneur with a history of creating successful start-ups; in 2014, Smith used $3 million of his own money to create the first iteration of Shipt, the company was acquired by Target in 2017 in a cash deal worth $550 million. Membership fees predominantly drive Shipt revenue generation.
Postmates is a food delivery service built as a last-mile delivery service platform connecting locals with shops. Postmates makes money by collecting fees (commission, delivery, service, cart, and cancellation fees). It also makes money via its subscription service (called Unlimted – $9.99/month or $99.99 annually) giving free delivery on every order of more than $12.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
