3 ms·

Misleading in what way? It's gross revenue, not profit.

jcdavis 11y ago
Indeed, but when the net is 20% of that it feels pretty misleading (at least to me). "Cut of money the drivers take" being 80%? The wording feels very off
- seattle_spring 11y ago
  Isn't Amazon's profit margins on sales something like 5% or worse? This doesn't seem any more disingenuous than most other businesses.
  - jcdavis 11y ago
    Lyft doesn't take inventory risk, has a fixed fee structure and doesn't perform most of the actual service (the drivers do). If you want to geek out, there are actually some standards for reporting gross vs net, see EITF 99-19 http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1218220143525&acceptedDisclaimer=true http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=121... Look at Square's S-1 for example, you won't find the phrase "gross revenue" once in the entire document - revenue = net, and they use "Gross Payment Volume" instead.
  - deleted 11y ago
    [deleted]
robzyb 11y ago
Some would argue that "gross revenue" should only include the amount that Lyft gets paid, not the amount that they hold in escrow for their drivers. This is more a question of semantics than anything else.
- pbreit 11y ago
  Also, accounting. When/if it goes public, it almost certainly will not refer to its total proceeds as "gross revenue".
gamblor956 11y ago
Gross revenue = income to which the company is entitled for the sale of goods or services. Gross profit = gross revenue less expenses (salaries, etc.) Lyft and Uber are not being paid by the passenger; they are being paid by the driver out of the fare paid to the driver for the service of booking the fare for the driver. Consequently, their gross revenue should only include their % of the fare, not the entire fare. Importantly, this is one of the reasons that both companies are having trouble with the classification of their drivers. Booking the entire fare as gross income strongly refutes their claims that drivers are independent contractors and not employees.

Indeed, but when the net is 20% of that it feels pretty misleading (at least to me). "Cut of money the drivers take" being 80%? The wording feels very off

seattle_spring 11y ago
Isn't Amazon's profit margins on sales something like 5% or worse? This doesn't seem any more disingenuous than most other businesses.
- jcdavis 11y ago
  Lyft doesn't take inventory risk, has a fixed fee structure and doesn't perform most of the actual service (the drivers do). If you want to geek out, there are actually some standards for reporting gross vs net, see EITF 99-19 http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1218220143525&acceptedDisclaimer=true http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=121... Look at Square's S-1 for example, you won't find the phrase "gross revenue" once in the entire document - revenue = net, and they use "Gross Payment Volume" instead.
- deleted 11y ago
  [deleted]

robzyb 11y ago

Some would argue that "gross revenue" should only include the amount that Lyft gets paid, not the amount that they hold in escrow for their drivers. This is more a question of semantics than anything else.

pbreit 11y ago
Also, accounting. When/if it goes public, it almost certainly will not refer to its total proceeds as "gross revenue".

gamblor956 11y ago

Gross revenue = income to which the company is entitled for the sale of goods or services. Gross profit = gross revenue less expenses (salaries, etc.) Lyft and Uber are not being paid by the passenger; they are being paid by the driver out of the fare paid to the driver for the service of booking the fare for the driver. Consequently, their gross revenue should only include their % of the fare, not the entire fare. Importantly, this is one of the reasons that both companies are having trouble with the classification of their drivers. Booking the entire fare as gross income strongly refutes their claims that drivers are independent contractors and not employees.