![]() ![]() For example, while Uber enjoyed a 12% pop in its stock price the day of its rosy Q3 pre-market earnings release, its stock slid 17% over the ensuing two months Obscured accounting changes will eventually – actually, quickly – be recognized by savvy investors. Most of Uber’s reported revenue growth was driven by one-off events, not sustainable improvements in business operations.These deep-in-the-weeds adjustments may seem like TMI, but they are important, because going forward, Uber will not be able to achieve anything near their impressive, but misleading Q3 2022 reported growth rates, for three reasons. After properly adjusting for these anomalies, Uber’s actual Q3 2022 Y-O-Y core business (Mobility and Delivery) growth was only 26.5%, and much of that was driven by take rate increases – the spread between prices and driver pay - not underlying growth in consumer demand or productivity improvements. The business press widely highlighted this impressive figure in their headlines and story ledes.īut Uber’s reported revenue growth rate was significantly inflated by a material change in its Mobility and Delivery revenue accounting, as well as by an acquisition in its Freight division, both of which were conveniently buried in an earnings report footnote but overlooked in Dara’s commentary and widespread press coverage. Zooming out now to examine Uber’s global financial results, on his Q3 2022 earnings call, Dara crowed that “Uber’s core business is stronger than ever,” exemplified by the company’s 72% Y-O-Y revenue growth rate. I’ve had to rely on estimates from independent sources for this analysis, because Uber has never disclosed data on its consumer prices, driver pay or trip demand trends for its US (or any other country’s) ridehail operations. In essence, Uber has traded off decreased ridehail demand (as measured by number of trips) in exchange for increased revenue and profitability. According to tracking data from YipitData, Uber’s number of US ridehail trips in Q3 2022 decreased 29% from pre-pandemic Q3 2019 levels, offset by the price hike of 41% over the same period. ![]() While Uber’s price escalation succeeded in boosting its mobility revenue – ridesharing demand is inelastic, at least at historical price levels - it also depressed consumer demand growth. This is equivalent to an annual price increase of 17.5% per year, considerably exceeding the CPI gain of 4.5% per year over the same period. According to data provided to the author by Second Measure, Uber’s average US ridehail fare per trip jumped by 30% from the beginning of 2018 to Q3 2019, and then, according to data from YipitData, by another 41% between Q3 2019 and Q3 2022 – for a total of 83% over the entire 45-month period. ![]() Uber began raising US ridehail prices at a double-digit percentage clip in 2018 as the company prepared for its 2019 IPO, and has continued hiking prices ever since. ![]()
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