# Leaked Documents Show Uber Cost Structure, Best-Performing Cities



## chi1cabby (May 28, 2014)

*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%)*


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## Ca$h4 (Aug 12, 2015)

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.


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## chi1cabby (May 28, 2014)

Ca$h4 said:


> 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.


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## CommanderXL (Jun 17, 2015)

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.


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## chi1cabby (May 28, 2014)

CommanderXL said:


> 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.


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## observer (Dec 11, 2014)

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.


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## Ca$h4 (Aug 12, 2015)

chi1cabby said:


> 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.


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## chi1cabby (May 28, 2014)

Ca$h4 said:


> 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.


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## Gemgirlla (Oct 16, 2014)

chi1cabby said:


> *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.
> 
> ...


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....


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## UberNorthStar (Jul 7, 2015)

Houston rates are $1,10/mile while Atlanta is (last I heard) 75¢/mile. The East Coast seems to have better rates.


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## chi1cabby (May 28, 2014)

Gemgirlla said:


> 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...


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## cybertec69 (Jul 23, 2014)

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.


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## Luberon (Nov 24, 2014)

My 2c:
1) Shanghai market is on unsustainable steroids given 138% driver incentives.
2) uberpool is a big money looser that is why they had to adjust for those losses between cities.


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## Casuale Haberdasher (Dec 7, 2014)

i


chi1cabby said:


> 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...


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## TwoFiddyMile (Mar 13, 2015)

Gemgirlla said:


> 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.


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## Michael - Cleveland (Jan 1, 2015)

CommanderXL said:


> 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.


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## Michael - Cleveland (Jan 1, 2015)

chi1cabby said:


> 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.


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