Uber Drivers Forum banner

1 - 17 of 17 Posts

·
Registered
Joined
·
10,169 Posts
Discussion Starter · #1 ·
http://www.foxbusiness.com/industri...-ubers-cost-structure-best-performing-cities/

FOXBusiness.com has obtained leaked documents that Uber is using to persuade investors to participate in its Uber China financing. The global ride-sharing company is close to finalizing a round of at least $1 billion that would value Uber China at more than $7 billion, according to a source with direct knowledge of the matter.

FOXBusiness.com has also learned that the company is telling potential investors that Uber China will be spun off as a separate business that could IPO before Uber.

The documents show that Uber's "net present value," a projection of cash flows, is $4.9 billion in Shanghai, $2.2 billion in Guangzhou and $1.8 billion in Shenzhen.

While Uber is the dominant car service app in the United States, it has a lesser market share in China, due to competition from services like Didi Kuadi.

Uber is also showcasing its "contribution margin" in various cities, a measurement of profitability that excludes variable costs. The company's "contribution margin" is at 11.1% in Stockholm and Johannesburg and 10.1% in San Francisco. Other top cities include London, Charleston, Melbourne, Washington DC and New York. The breakdown shows that Uber pays roughly 80% of what it generates from gross bookings in driver commissions.

Uber is the world's most valuable startup with a $50 billion valuation. Its long list of investors include Google Ventures (GOOGL), Blackrock (BLK) and Goldman Sachs (GS).

Uber declined to comment.

Below are the specific data points obtained by FOXBusiness.com and given to the company's investors.

Document 1: City Profitability (Mar-2015)

Selected Cities Contribution Margin

Stockholm 11.1%
Johannesburg 11.1%
San Francisco 10.1%
London 9.7%
Charleston 9.5%
Melbourne 9.3%
Washington DC 9.3%
New York 9.2%
Boston 9.1%
Paris 8.7%
Chicago 7.0%
Sydney 6.4%
Atlanta 5.4%
Mexico City 4.9%
Miami 4.4%
Baltimore 4.1%
Minneapolis 4.1%
Houston 4.1%
Phoenix 3.8%
Seattle 3.5%

Note: margins adjusted for uberPOOL promotions

Document 2: Selected City NPVs

Selected City NPVs (net present value)
Shanghai NPV: $4.9bn
Guangzhou NPV: $2.2bn
Shenzhen NPV: $1.8bn

Document 3: City Contribution Margins

San Francisco Today
Gross Bookings 100%
Driver Commission (78.1)%
Safe Rides Fee 5.0%
Driver Incentives (1.4%)
Returns (0.4%)
Net Revenue 25.1%

Payment Fees (2.4)%
Mobile (Net) (0.2)%
Network (0.3)%
Other COGS (1.9)%
Sales & Marketing (2.9)%
Insurance (3.5)%
Other Opex (3.8)%
Contribution Margin 10.1%

London Today

Gross Bookings 100%
Driver Commission (80.0)%
Safe Rides Fee 0.0%
Driver Incentives (1.6%)
Returns (0.8%)
Net Revenue (17.6%)

Payment Fees (1.5) %
Mobile (Net) (1.0) %
Network (0.2)%
Other COGS (0.6)%
Sales & Marketing (3.5)%
Insurance (0)%
Other Opex (1.1)%
Contribution Margin 9.7%

Shanghai Launch
Gross Bookings 100%
Driver Commission (80.0)%
Safe Rides Fee 0.0%
Driver Incentives (138.8)%
Returns (0.3%)
Net Revenue (119.2%)

Payment Fees (1.0) %
Mobile (Net) (5.6) %
Network (0.8)%
Other COGS (1.2)%
Sales & Marketing (15.3)%
Insurance (7.0)%
Other Opex (7.6)%
Contribution Margin (157.6%)
 

·
Registered
Joined
·
854 Posts
FOX is taking a leak alright. This is all "blue sky" PR fluff probably put out by Plouffe. Uber's model is a mess at almost every level. Uber has a "generic dispatch app" that any company can cheaply clone and Uber charges drivers about 25% commission. Any other company could charge a 15% commission and still make good money. Uber drivers are barely making minimum wage. The competition is coming soon at a city near you.
 

·
Registered
Joined
·
10,169 Posts
Discussion Starter · #3 ·
FOX is taking a leak alright. This is all "blue sky" PR fluff probably put out by Plouffe. Uber's model is a mess at almost every level. Uber has a "generic dispatch app" that any company can cheaply clone and Uber charges drivers about 25% commission. Any other company could charge a 15% commission and still make good money. Uber drivers are barely making minimum wage. The competition is coming soon at a city near you.
This is a legit breakdown of Uber's cost structure.
Some of what you've posted may be true and some of it may be false.
But All of your post is completely off topic to this thread.
 

·
Registered
Joined
·
10,169 Posts
Discussion Starter · #5 ·
I would think insurance would be a big cost.
Insurance is still not a big cost for Uber in the US since it only provides 'App On' Primary Liability coverage in about ~16 States that passed New TNC Laws this spring & summer. In rest of the US markets, Uber's coverage is Primary Liability during the 'Active Ride' phase only. And remember that the Collison Damage Coverage has $1,000 Deductible.

In UK, and in NYC, it's Uber Drivers that purchase their own Private Hire insurance.
 

·
Super Moderator
Joined
·
15,556 Posts
Uber is also showcasing its “contribution margin” in various cities, a measurementof profitability that excludes variable costs.

Sounds like it's using the "drivers fares" approach here too.
 
  • Like
Reactions: tohunt4me

·
Registered
Joined
·
854 Posts
This is a legit breakdown of Uber's cost structure.
Some of what you've posted may be true and some of it may be false.
But All of your post is completely off topic to this thread.
With all due respect, you may believe that these numbers are "legit." But I don't because I don't see where they are "official" and were calculated using GAAP (Generally Accepted Accounting Princples). I don't believe questioning the legitimacy of these "leaked" calculations is off-topic.
 

·
Registered
Joined
·
10,169 Posts
Discussion Starter · #8 ·
With all due respect, you may believe that these numbers are "legit." But I don't because I don't see where they are "official" and were calculated using GAAP (Generally Accepted Accounting Princples). I don't believe questioning the legitimacy of these "leaked" calculations is off-topic.
Thank you for actually posting 'On Topic'. :)
These internal numbers are from docs pertaining to Uber's fundraising round for UberCHINA, led by HillHouse Capital. As such, these numbers are likely based on GAAP, produced by an independent accounting firm, and thus more reliable. Notice the detailed breakdown of numbers for the SF, London & Shanghai.
 

·
Registered
Joined
·
2,227 Posts
http://www.foxbusiness.com/industri...-ubers-cost-structure-best-performing-cities/

FOXBusiness.com has obtained leaked documents that Uber is using to persuade investors to participate in its Uber China financing. The global ride-sharing company is close to finalizing a round of at least $1 billion that would value Uber China at more than $7 billion, according to a source with direct knowledge of the matter.

FOXBusiness.com has also learned that the company is telling potential investors that Uber China will be spun off as a separate business that could IPO before Uber.

The documents show that Uber's "net present value," a projection of cash flows, is $4.9 billion in Shanghai, $2.2 billion in Guangzhou and $1.8 billion in Shenzhen.

While Uber is the dominant car service app in the United States, it has a lesser market share in China, due to competition from services like Didi Kuadi.

Uber is also showcasing its "contribution margin" in various cities, a measurement of profitability that excludes variable costs. The company's "contribution margin" is at 11.1% in Stockholm and Johannesburg and 10.1% in San Francisco. Other top cities include London, Charleston, Melbourne, Washington DC and New York. The breakdown shows that Uber pays roughly 80% of what it generates from gross bookings in driver commissions.

Uber is the world's most valuable startup with a $50 billion valuation. Its long list of investors include Google Ventures (GOOGL), Blackrock (BLK) and Goldman Sachs (GS).

Uber declined to comment.

Below are the specific data points obtained by FOXBusiness.com and given to the company's investors.

Document 1: City Profitability (Mar-2015)

Selected Cities Contribution Margin

Stockholm 11.1%
Johannesburg 11.1%
San Francisco 10.1%
London 9.7%
Charleston 9.5%
Melbourne 9.3%
Washington DC 9.3%
New York 9.2%
Boston 9.1%
Paris 8.7%
Chicago 7.0%
Sydney 6.4%
Atlanta 5.4%
Mexico City 4.9%
Miami 4.4%
Baltimore 4.1%
Minneapolis 4.1%
Houston 4.1%
Phoenix 3.8%
Seattle 3.5%

Note: margins adjusted for uberPOOL promotions

Document 2: Selected City NPVs

Selected City NPVs (net present value)
Shanghai NPV: $4.9bn
Guangzhou NPV: $2.2bn
Shenzhen NPV: $1.8bn

Document 3: City Contribution Margins

San Francisco Today
Gross Bookings 100%
Driver Commission (78.1)%
Safe Rides Fee 5.0%
Driver Incentives (1.4%)
Returns (0.4%)
Net Revenue 25.1%

Payment Fees (2.4)%
Mobile (Net) (0.2)%
Network (0.3)%
Other COGS (1.9)%
Sales & Marketing (2.9)%
Insurance (3.5)%
Other Opex (3.8)%
Contribution Margin 10.1%

London Today

Gross Bookings 100%
Driver Commission (80.0)%
Safe Rides Fee 0.0%
Driver Incentives (1.6%)
Returns (0.8%)
Net Revenue (17.6%)

Payment Fees (1.5) %
Mobile (Net) (1.0) %
Network (0.2)%
Other COGS (0.6)%
Sales & Marketing (3.5)%
Insurance (0)%
Other Opex (1.1)%
Contribution Margin 9.7%

Shanghai Launch
Gross Bookings 100%
Driver Commission (80.0)%
Safe Rides Fee 0.0%
Driver Incentives (138.8)%
Returns (0.3%)
Net Revenue (119.2%)

Payment Fees (1.0) %
Mobile (Net) (5.6) %
Network (0.8)%
Other COGS (1.2)%
Sales & Marketing (15.3)%
Insurance (7.0)%
Other Opex (7.6)%
Contribution Margin (157.6%)
It's interesting that they don't list Los Angeles given that they have said it is Uber's largest market. Perhaps it is because it is the market with some of the lowest rates....
 

·
Registered
Joined
·
10,169 Posts
Discussion Starter · #11 ·
It's interesting that they don't list Los Angeles given that they have said it is Uber's largest market. Perhaps it is because it is the market with some of the lowest rates....
Hey Gem!
These metrics were released selectively by Uber, so who knows why LA isn't included. And Uber loves saying stuff like "biggest market" or "fastest growing market"...
Didn't you hear UberCHINA is going to be Uber biggest market, even though 1/3 of the rides there are fake...
;)
 

·
Banned
Joined
·
3,041 Posts
New York is pretty high considering all the mass transportation we have here, from the vast subway and buss services, yellow Taxis, livery cabs, plethora of black car FHV bases, and other forms of transportation, taking all that competition into account, they are killing it here in nyc. In some of those cities at the top Uber is pretty much the only game in town, especially SF where their transit system is pretty much non existent.
 

·
Registered
Joined
·
6,422 Posts
i
Hey Gem!
These metrics were released selectively by Uber, so who knows why LA isn't included. And Uber loves saying stuff like "biggest market" or "fastest growing market"...
Didn't you hear UberCHINA is going to be Uber biggest market, even though 1/3 of the rides there are fake...
;)
POST # 11/chi1cabby: Please pardon the
Threaderruption
but Your steady Rate of Improvement
has You up to #39 from #42 @125.064%
on the UPNF Approval Ratings List.

https://uberpeople.net/posts/338664

Congratulations, and Thank You for
making UPNF the World Leader in
knowledge access regarding the
App-Based TNC Experience, in general,
and the "Best Disinfectant: Daylight"
that You wield efficiently to expose
#[F]Uber's "Bottomless Duplicity",
specifically.

Keep calm and Carry on All.
chi1cabby is on the job!:cool:
 

·
Registered
Joined
·
17,830 Posts
It's interesting that they don't list Los Angeles given that they have said it is Uber's largest market. Perhaps it is because it is the market with some of the lowest rates....
Low rates mean lower revenue to expenditure ratio.
Uber lies anyways, but possibly they are developing a filter regarding how much they should lie.
 

·
Premium Member
Joined
·
8,044 Posts
I wonder why insurance is so low in SF (3.5%) and non-existent in London (0%), but 7% in Shanghai? I would think insurance would be a big cost.
Because insurance REQUIREMENTS vary by state and by country.
 

·
Premium Member
Joined
·
8,044 Posts
This is a legit breakdown of Uber's cost structure.
Some of what you've posted may be true and some of it may be false.
But All of your post is completely off topic to this thread.
No kidding!
Geez... talk about missing the forest for the trees.
The 'news' in the leaked document - which shouldn't comes as a surprise to anyone - is that the business model world wide currently generates a gross profit of ~25% on revenues... with no inventory investment, no receivables and limited liability. Most manufacturers would kill their mother for numbers like that - and it goes a long way in explaining how and why Uber has been able to attract the investment money it has.
 
1 - 17 of 17 Posts
Top