As of 2021, on net revenues of $17.45 billion, Uber posted a net loss of just $496 million, primarily thanks to the business divestitures of various assets. In fact, by the first nine months of 2022, Uber posted a loss from operations of $1.69 billion on revenues for the same period of $23.27 billion. Thus, Uber is not profitable as of 2022.
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 generated $8.34 billion in revenues, in Q3 2022, compared to $4.84 billion in Q3 2021. The mobility segment generated $3.83 billion in revenues, followed by delivery at $2.77 billion and freight at $1.75 billion. The take rate for the mobility segment was 27.9% vs. 20.2% for the delivery segment.
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.
Whereas, in the delivery business, where competition is still 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.
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.
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.
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).
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, and Tapingo. 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.
Instacart’s business model enables an easy setup 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 running performance advertising on its platform.
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 primarily makes money by collecting fees from drivers who complete rides on the platform.
Postmates is a food delivery service built as a last-mile platform connecting locals with shops. Postmates collects 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 orders of more than $12.
Netflix is a profitable company, which net profits were $5.1 billion in 2021. Growing from $2.7 billion in 2020. The company runs a negative cash flow businessmodel, where it anticipates the costs of content development and licensing through the platform. Those costs get amortized over the years, as subscribers stick to the platform.
Amazon was profitable in 2021. The company generated over $33 billion in net income, primarily driven by the Amazon AWS business, which contributed to over 55% of its operating margins and other profitable parts like Amazon Prime and Ads. The Amazon e-commerce platform runs at tight operating margins since it’s built for scale.
Uber made over $17.45 billion in revenues in 2021, and its losses were $496 million, thus in 2021, Uber was not profitable. In 2021, Uber generated over $17.4 billion in revenues, mostly coming from mobility ($6.95B or 39.8% of its total revenues) and delivery with Uber Eats ($8.36B or 47.9% of its total revenues).
Microsoft is the most profitable tech giant, with 41.6% operating margins, in 2021. Followed by Facebook (Meta) with 39.6% operating margins. Apple, with 29.6% operating margins. Google, with 22.6% operating margins. And Amazon’s 5.2% operating margins.
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.
