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Basic rundown of Rev / Loss from reports: Q1.12: 1.4M / 3.4M Q2.12: 2.1M /2.3M Q3.12: 4.3M / 5.4M Q4.12: 8.2M / 7.0M Q1.13: 12.9M / 7.3M Q2.13: 19.3M / 8.1M 20

Basic rundown of Rev / Loss from reports: Q1.12: 1.4M / 3.4M Q2.12: 2.1M /2.3M Q3.12: 4.3M / 5.4M Q4.12: 8.2M / 7.0M Q1.13: 12.9M / 7.3M Q2.13: 19.3M / 8.1M 2013 (total): 104M / 56M Q1.14: 45.6M / 52.2M Q2.13: 56.9M / 108.8M Rev grew faster than losses consistently all through 2012 and 2013 which is really amazing (2013 is when Uber jumped from a 330M valuation to a 3.5B valuation so investors noticed too)...then losses abruptly charged ahead in 2014 (see data pulled below). Uber launched China in Q1 of 2014 - they are basically betting huge on China / India, and smartly being very clear to their investors that the $$ is for that very costly cause, so they can earmark the cash they are burning for international expansion as "meant to be burned." Also, if the bet goes the wrong way, they can (sort of) cleanly write it off as a failed (billion dollar) project, and ask investors to focus on their (hopefully by then) cash-cow business in the US. Burn is all about international expansion, which is SUPER expensive, especially at the rate they are attempting. There is an insane learning curve that costs a lot of money to get on the other side of (hiring, culture, regulations, consumers, marketing are all different in each country - not to mention the fact that local competitors have all those in line already!) - look at pretty much any major US company that has attempted to succeed in China. Good luck!

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andygates 11y ago
So what happens when they've aggressively expanded into all their target markets and are still not profitable and have nowhere else to go? Pure expansion is pretty much the sign of a first-mover bubble company who will collapse with their advantage being copied by calmer second-movers...
- yummyfajitas 11y ago
  Expansion costs money, running operations is cheaper. So when growth stops, profit happens almost by default. Simple math. Suppose opening a city costs $10 (once) and returns $1/year in revenue. Year 1: Open 1 city, loss = $10. Year 2: Open 3 cities, loss = $29 (spending $30 on new cities, gaining $1 from year 1's city). Year 3: Open 9 cities, loss = $86. Year 4: expansion stops, profit = $13.
  - forgetsusername 11y ago
    >So when growth stops, profit happens almost by default. That's a pretty bubblicious thing to say. Your model depends on the nature of the costs. Expansion costs aren't 100% and operational costs aren't 0%. I realize it was just a quick example, but profit will depend on how their costs are actually distributed. Certainly not automatic.
    - yummyfajitas 11y ago
      Yes, I merely meant to illustrate how a business can become profitable simply by stopping expansion. I didn't mean to imply that this 3 second toy model proves it always will, though I guess my phrasing wasn't clear.
  - angersock 11y ago
    Your math suggests that it will take at least 9 years to be profitable again.
  - curiousjorge 11y ago
    So when growth stops, profit happens almost by said nobody ever
- hoopd 11y ago
  It wouldn't be the first time. What happens to the disrupted sector is the people who work there go find new jobs. Then when the giant monopolizer fails the sector can't return to the way it was before, too much knowledge has been lost. Example: if WalMart closed tomorrow most of the thousands of small and medium sized businesses they put under wouldn't come back. If Uber's model turns out to be unrealistic long-term the intellectual capital lost from the global taxi cab sector will only be partially recoverable. When a company grows based on money they've earned it's the normal process of scaling. When they grow based on money they've borrowed it's no longer the market giving them the thumbs up, it's a couple of dozen investors. By the time WalMart was rapidly expanding it was clear their business model worked, might be evil but it works. It's not clear that Uber's business model is even legal.
- joshjkim 11y ago
  You are right, IF the early markets are still not profitable - the key numbers that we don't have are: how are the first 100 cities they launched doing? how are the first 10 cities they launched doing? If those cities have achieved profitability or are approaching it, then it works. Unfortunately, we don't have those #s. However, if you look here there's some indication that earlier markets were at least closing the operating loss gap: QQ4.12: 8.2M / 7.0M Q1.13: 12.9M / 7.3M Q2.13: 19.3M / 8.1M Losses slowed dramatically here, while revenue grew. Note, Uber was still launching cities at this point, but had already taken most of the major US markets - my guess is that SF + NY + LA were getting closer to paying for themselves while they streamlined their launch process into smaller markets in the US. I feel OK making that guess because it's hard to believe that an investor would not have asked for that, and it's hard to believe that an investor would value Uber at $3.5B (the valuation at that time) if that wasn't happening. (Note - I understand that investors are not always actually this rational, I'm just making an assumption in this case). I imagine the pitch was: look at our early markets, they are cash-cows, and we know how to make them. Now, give us $XB to go make more of these cash-cows please and don't ask us about losses for a long time, thanks! Which is why they don't really care about these leaked #s.

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andygates 11y ago

So what happens when they've aggressively expanded into all their target markets and are still not profitable and have nowhere else to go? Pure expansion is pretty much the sign of a first-mover bubble company who will collapse with their advantage being copied by calmer second-movers...

yummyfajitas 11y ago
Expansion costs money, running operations is cheaper. So when growth stops, profit happens almost by default. Simple math. Suppose opening a city costs $10 (once) and returns $1/year in revenue. Year 1: Open 1 city, loss = $10. Year 2: Open 3 cities, loss = $29 (spending $30 on new cities, gaining $1 from year 1's city). Year 3: Open 9 cities, loss = $86. Year 4: expansion stops, profit = $13.
- forgetsusername 11y ago
  >So when growth stops, profit happens almost by default. That's a pretty bubblicious thing to say. Your model depends on the nature of the costs. Expansion costs aren't 100% and operational costs aren't 0%. I realize it was just a quick example, but profit will depend on how their costs are actually distributed. Certainly not automatic.
  - yummyfajitas 11y ago
    Yes, I merely meant to illustrate how a business can become profitable simply by stopping expansion. I didn't mean to imply that this 3 second toy model proves it always will, though I guess my phrasing wasn't clear.
- angersock 11y ago
  Your math suggests that it will take at least 9 years to be profitable again.
- curiousjorge 11y ago
  So when growth stops, profit happens almost by said nobody ever
hoopd 11y ago
It wouldn't be the first time. What happens to the disrupted sector is the people who work there go find new jobs. Then when the giant monopolizer fails the sector can't return to the way it was before, too much knowledge has been lost. Example: if WalMart closed tomorrow most of the thousands of small and medium sized businesses they put under wouldn't come back. If Uber's model turns out to be unrealistic long-term the intellectual capital lost from the global taxi cab sector will only be partially recoverable. When a company grows based on money they've earned it's the normal process of scaling. When they grow based on money they've borrowed it's no longer the market giving them the thumbs up, it's a couple of dozen investors. By the time WalMart was rapidly expanding it was clear their business model worked, might be evil but it works. It's not clear that Uber's business model is even legal.
joshjkim 11y ago
You are right, IF the early markets are still not profitable - the key numbers that we don't have are: how are the first 100 cities they launched doing? how are the first 10 cities they launched doing? If those cities have achieved profitability or are approaching it, then it works. Unfortunately, we don't have those #s. However, if you look here there's some indication that earlier markets were at least closing the operating loss gap: QQ4.12: 8.2M / 7.0M Q1.13: 12.9M / 7.3M Q2.13: 19.3M / 8.1M Losses slowed dramatically here, while revenue grew. Note, Uber was still launching cities at this point, but had already taken most of the major US markets - my guess is that SF + NY + LA were getting closer to paying for themselves while they streamlined their launch process into smaller markets in the US. I feel OK making that guess because it's hard to believe that an investor would not have asked for that, and it's hard to believe that an investor would value Uber at $3.5B (the valuation at that time) if that wasn't happening. (Note - I understand that investors are not always actually this rational, I'm just making an assumption in this case). I imagine the pitch was: look at our early markets, they are cash-cows, and we know how to make them. Now, give us $XB to go make more of these cash-cows please and don't ask us about losses for a long time, thanks! Which is why they don't really care about these leaked #s.