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“Uber had $6.6 billion in cash at quarter's end, down from around $7.2 billion at the end of Q1 ... Uber's global ride-share business was margin positive last q

“Uber had $6.6 billion in cash at quarter's end, down from around $7.2 billion at the end of Q1 ... Uber's global ride-share business was margin positive last quarter, which is a flip from Q1.” Uber is on a loss run rate of $2.4 billion annually mainly from the US market. The questions become: * Given that global is positive, what is the loss in US? What will it take to flip US to positive? What will Lyft do? * Can Uber keep global markets positive or will they have similar challengers that will force additional investment?

adventured 9y ago
Uber isn't losing $2.4 billion primarily in the US market, you've got it the wrong way. Their biggest losses are from the international side of the business, spending on that build-out effort. Margin positive internationally is not the same as earning a profit after all expenses. What they're talking about is international revenue exceeding international losses finally (the US market has been above that line for a long time).
- WisNorCan 9y ago
  "The $645 million is adjusted EBIT, while Uber's Q2 EBITDA loss was $534 million (down from $598 million in Q1). Uber's global ride-share business was margin positive last quarter, which is a flip from Q1." The context around EBIT/EBITDA implies that they are discussing operating margin and not gross margin. Can you clarify what major expenses you believe would be excluded?
malandrew 9y ago
You can't just extrapolate out to 2.4B. Just one quarter ago, that same extrapolation would have been more than 2.8B. They are improving their efficiency while increasing their revenues. I wouldn't be surprised if that loss run rate is $2.0B flat by end of Q4 while gross revenues continue to rise. Lyft on the other hand has losses almost twice as high as Uber's relative to gross bookings. People accuse Uber of buying market share, but the truth is that Lyft is the one actually buying market share instead of earning it.
- WisNorCan 9y ago
  Sure you can. It is not obvious what the right methodology would be: * Should you assume that losses are going to get worse? Lyft raised their largest round so far: $600M at $7.5 Billion. Presumably, they are going to use that money to get even more aggressive. I hear that some US markets are already a mess for Uber. Others are good. * Should you assume it is going to get better? In the past quarter it has, so you might want to assume that it will continue. Also, I don't know if I trust Uber's financial reporting. This is clearly a PR move and you have a lot of choices in private accounting. Assuming steady state does not strike me as an unreasonable way of forecasting.
  - malandrew 9y ago
    Losses may or may not get worse. AFAIK, they have gotten better every quarter since China was sold off. Assuming steady state or steady state of change are both reasonable ways of forecasting. A strong trend line spanning several quarters better supports the latter in this case. For what's its worth, I recently saw losses as a percent of gross bookings posted elsewhere: Lyft at 13% vs Uber at 8.5%. Are you assuming that Lyft will increase subsidies after this new round of funding? If so, that will only worsen its losses as a percent of gross bookings. Furthermore, that isn't Lyft's biggest round. They raised $1B in January 2016. Uber just needs to remain more efficient than its competition in all markets, which is easier to do with global operations and multiple business lines that are easy to scale out.

adventured 9y ago

Uber isn't losing $2.4 billion primarily in the US market, you've got it the wrong way. Their biggest losses are from the international side of the business, spending on that build-out effort. Margin positive internationally is not the same as earning a profit after all expenses. What they're talking about is international revenue exceeding international losses finally (the US market has been above that line for a long time).

WisNorCan 9y ago
"The $645 million is adjusted EBIT, while Uber's Q2 EBITDA loss was $534 million (down from $598 million in Q1). Uber's global ride-share business was margin positive last quarter, which is a flip from Q1." The context around EBIT/EBITDA implies that they are discussing operating margin and not gross margin. Can you clarify what major expenses you believe would be excluded?

malandrew 9y ago

You can't just extrapolate out to 2.4B. Just one quarter ago, that same extrapolation would have been more than 2.8B. They are improving their efficiency while increasing their revenues. I wouldn't be surprised if that loss run rate is $2.0B flat by end of Q4 while gross revenues continue to rise. Lyft on the other hand has losses almost twice as high as Uber's relative to gross bookings. People accuse Uber of buying market share, but the truth is that Lyft is the one actually buying market share instead of earning it.

WisNorCan 9y ago
Sure you can. It is not obvious what the right methodology would be: * Should you assume that losses are going to get worse? Lyft raised their largest round so far: $600M at $7.5 Billion. Presumably, they are going to use that money to get even more aggressive. I hear that some US markets are already a mess for Uber. Others are good. * Should you assume it is going to get better? In the past quarter it has, so you might want to assume that it will continue. Also, I don't know if I trust Uber's financial reporting. This is clearly a PR move and you have a lot of choices in private accounting. Assuming steady state does not strike me as an unreasonable way of forecasting.
- malandrew 9y ago
  Losses may or may not get worse. AFAIK, they have gotten better every quarter since China was sold off. Assuming steady state or steady state of change are both reasonable ways of forecasting. A strong trend line spanning several quarters better supports the latter in this case. For what's its worth, I recently saw losses as a percent of gross bookings posted elsewhere: Lyft at 13% vs Uber at 8.5%. Are you assuming that Lyft will increase subsidies after this new round of funding? If so, that will only worsen its losses as a percent of gross bookings. Furthermore, that isn't Lyft's biggest round. They raised $1B in January 2016. Uber just needs to remain more efficient than its competition in all markets, which is easier to do with global operations and multiple business lines that are easy to scale out.