# Uber’s Losses Grow, But So Do Its Profit Projections



## chi1cabby (May 28, 2014)

By Amir Efrati
Jan 11, 2016

https://www.theinformation.com/uber...oken=d8140c41f1813dc7fc66d78fd6db10612192fdfb

Uber's losses grew to nearly a billion dollars in the first half of last year, nearly 50% more than its full-year losses in 2014, according to confidential documents issued by the company as part of financing efforts last year. Net revenue in the first half of 2015 was $663 million, the documents showed. (Scroll down to see the documents.)

The rising losses reflect expansion efforts in places like China and India. But the company expects older markets in developed countries to generate billions of dollars in profit in the coming years, according to a person familiar with Uber's thinking.

*The Takeaway*
_"Uber is losing money to gain market share in emerging markets that have fierce incumbents, but overall, it's increasing the percentage of money it keeps from rider payments. And one projection shows the company could generate $14 billion in profit from developed-world markets during the next four years, as more cities turn cash-flow positive.
The five-year-old ride-sharing company's finances are being increasingly scrutinized as it takes in new financing at a more than $62 billion private valuation and meets with wealth management firms and others."_

Uber lost $671.4 million in 2014 and $987.2 million in the first half of 2015, the documents show. If the company continued on that trajectory through the second half of last year, Uber's full year loss would have been more than $2.5 billion.

To be sure, Uber isn't in danger of running out of money. The company has raised more than $6 billion. According to the documents, the company had $4.15 billion in cash and cash equivalents as of June 30, 2015, up from $1.96 billion at the end of 2014.

Uber's overall revenue appeared on track to nearly triple to more than *$1.5 billion* from $495 million between 2015 and 2014, based on the documents. The increased losses were primarily a result of higher sales and marketing expenses. For instance, net revenue rose 30.8% between the first and second quarters of 2015 while sales and marketing costs doubled to nearly $200 million during the same period.

One positive trend: Uber is keeping a greater percentage of the money it collects from rides. In 2014, the company generated $495.3 million in net revenue, or 16.9% of its $2.9 billion in gross bookings, with much of the rest going to drivers. The first half net revenue amounted to 18.3% of $3.6 billion in gross bookings.

Despite the losses, a person familiar with Uber's thinking says the company could be profitable overall in its developed-country markets starting this year. Uber's developed world operations include the U.S., Japan, Australia, Israel, U.K. and other parts of Europe. Dozens of cities in the developed world are already said to be cash-flow positive, with more turning that way this year.

According to one projection seen by The Information, Uber could generate $167 million in earnings before interest and taxes from $4.4 billion in net revenue in those developed markets this year, compared to a loss of $431 million in 2015 on $1.8 billion in net revenue. The projection suggested Uber would generate an $8.2 billion profit in 2019 from $22.7 billion in net revenue. During the next four years, according to the projection, Uber would expect to generate nearly $14 billion in profit in developed markets.

A spokeswoman for Uber declined to comment.

Projections for the developing world couldn't be obtained. But if the aforementioned figures turn out to be even partially in line with actual results, it would give Uber breathing room to continue pouring funds into Asia and position itself to benefit from future growth in those markets. In China, it faces numerous product, operations and financing challenges in its fight against incumbent Didi Kuaidi there, as we reported in depth today. In India, Uber business chief Emil Michael says the company saw immense gains in market share in 2015 versus incumbent Ola Cabs.


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## chi1cabby (May 28, 2014)

Articles on previous leaked Uber financials:

Aug 28, 2015
*Leaked Documents Show Uber Cost Structure, Best-Performing Cities*

Aug 5, 2015
*Here Are the Internal Documents that Prove Uber Is a Money Loser*

June 29, 2015
*Uber Bonds Term Sheet Reveals $470 Million in Operating Losses*

Nov 20, 2014
*(Updated) Now I Know Why Investors Are Going Hog Wild About Uber ...*


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## ABC123DEF (Jun 9, 2015)

Uber is losing money, the drivers are losing money, investors are losing money, riders are getting cheap crappy rides from a broke driver in an unsafe car...so it's just a time and resource suck? Nice.


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## Altima ATL (Jul 13, 2015)

I really thought this phrase was funny:


chi1cabby said:


> a person familiar with Uber's thinking.


Is used at least twice - made me laugh.



chi1cabby said:


> One positive trend: Uber is keeping a greater percentage of the money it collects from rides.


See - there are some positive things on this board.

The mention as well that Uber needs to keep more of the fare - well, we all know they are trying to be very creative in that respect.

Just wondering if they can keep up the influx of new drivers over the next 4 years to be able to realize the vision of actually turning a profit.


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## cleansafepolite (Dec 14, 2015)

chi1cabby said:


> Articles on previous leaked Uber financials:
> 
> Aug 28, 2015
> *Leaked Documents Show Uber Cost Structure, Best-Performing Cities*
> ...


Your still tops man. I wish they would leak effects on driver earnings..it probably all here if you know how to look. It is surprizing that they are not obliged to tel how many drivers they have in different regions.


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## LAuberX (Jun 3, 2014)

I'm sure the bump in SRF fees helped that revenue projection...


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## chi1cabby (May 28, 2014)

_Uber's overall revenue appeared on track to nearly triple to more than *$1.5 billion* from $495 million between 2015 and 2014, based on the documents._
But in 2014, Uber had projected 2015 revenue of* $2 billion,* per BI's Henry Blodget & Allyson Shontell.


chi1cabby said:


> Nov 20, 2014
> *(Updated) Now I Know Why Investors Are Going Hog Wild About Uber ...*


_Uber is expected to hit anannual revenue run rate of $10 billion by the end of 2015, sources told Business Insider's Henry Blodget.

Uber keeps 20% of every transaction, which means Uber will be netting about $2 billion on $10 billion gross revenue._


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## chi1cabby (May 28, 2014)

_In 2014, the company generated $495.3 million in net revenue, or *16.9%* of its $2.9 billion in gross bookings, with much of the rest going to drivers. The first half net revenue amounted to *18.3%* of $3.6 billion in gross bookings._


LAuberX said:


> I'm sure the bump in SRF fees helped that revenue projection...


Yes, Uber not only raised the SRFs, but also the commission on New Drivers:

May 18, 2015:* Uber Tests Taking Even More From Its Drivers With 30% Commission*
Aug 2015: *Updated List of Markets Where UberX Commission For New Drivers Is 25% Or 28%*
Sept 2015: *Updated List of Markets With Increased Safe Ride Fee*


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## Altima ATL (Jul 13, 2015)

And UberPool increases their revenue share.

And the new commute thing they are trying to launch will potentially increase it more.

I am not sure why they don't increase the fares - that would increase revenue.


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## chi1cabby (May 28, 2014)

*Facing a Price War, Uber bets on volume*
*http://www.bloomberg.com/news/articles/2016-01-21/facing-a-price-war-uber-bets-on-volume*
*







*


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## UberProphet? (Dec 24, 2014)

498 + 697 = 1.195 billion $ per quarter spending. 5 billion $ per year

What could they be spending all that money on?


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## Rut Dog (Nov 13, 2014)

chi1cabby said:


> One positive trend: Uber is keeping a greater percentage of the money it collects from rides.


Hey Travis, here's an idea. Charge $3 per mile and take 30%.

How about we both make some money?


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## ABC123DEF (Jun 9, 2015)

Altima ATL said:


> And UberPool increases their revenue share.
> 
> And the new commute thing they are trying to launch will potentially increase it more.
> 
> I am not sure why they don't increase the fares - that would increase revenue.


Because that would be too easy and it would make for happier drivers who'd actually have money for bills AND savings. We can't have that.


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## Papa (May 14, 2015)

chi1cabby said:


> By Amir Efrati
> Jan 11, 2016
> 
> https://www.theinformation.com/uber...oken=d8140c41f1813dc7fc66d78fd6db10612192fdfb
> ...


This is the core issue, and should be the main focus for all drivers: "Fee Reduction" along with rates, and policies...

Uber's overall revenue appeared on track to nearly triple to more than *$1.5 billion* from $495 million between 2015 and 2014, based on the documents. The increased losses were primarily a result of higher sales and marketing expenses. For instance, net revenue rose 30.8% between the first and second quarters of 2015 while sales and marketing costs doubled to nearly $200 million during the same period.

One positive trend: Uber is keeping a greater percentage of the money it collects from rides. In 2014, the company generated $495.3 million in net revenue, or 16.9% of its $2.9 billion in gross bookings, with much of the rest going to drivers. The first half net revenue amounted to 18.3% of $3.6 billion in gross bookings.


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## phillipzx3 (May 26, 2015)

Rut Dog said:


> Hey Travis, here's an idea. Charge $3 per mile and take 30%.
> 
> How about we both make some money?


Because that would be a rate higher that a taxi. At $3.00 a mile there's no excuse to not carry a $1 million commercial policy on your car 24/7-365.


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