About Those Uber Revenue Numbers

Uber generates lots of revenue. Everyone knows it. The company’s roughly 20 percent cut of ride spend on its platform adds up to big numbers. How big, of course, is the real question.

New data published by Business Insider helps put Uber’s revenue into perspective. However, before we get to the new sums, let’s rewind. Here’s TechCrunch in December of 2013, reporting on leaked Uber revenue figures — a story that Valleywag’s Nitasha Tiku broke — from October of that year, emphasis is mine:

The numbers span a period of between mid-October and mid-November of 2013 and allow us to form a picture, though incomplete, of Uber’s income and user statistics over the period. According to our calculations based on the information laid out in the dashboard screenshots — and assuming some similarity in numbers for the rest of the year — the car service should be pulling in over $1B a year in gross bookings. At a rough 20% cut, a figure Valleywag notes Kalanick has alluded to, that would place Uber’s slice of the revenue around $213M a year.

So, Uber at the time was doing rides at about a $1 billion run rate, and bringing in a more than $200 million yearly cut. Damn fine numbers, really.

Cut to today, when Business Insider published data from Uber’s December of 2013, just one month after the period the figures above were taken from. It was a big period for the firm, with New Year’s Eve revenue spiking year-over-year, and lots of markets doing high volumes of rides.

Here’s how the Business Insider article frames it:

If you assume annual run rate based on the December 2013 data, Uber’s top five markets (NYC, DC, San Francisco, Chicago and Los Angeles) would generate about $1 billion a year. Again, that’s without taking Uber’s growth and expansion into account during 2014. That’s in line with rumored revenue estimates for Uber, which suggest Uber will generate $1.5-2 billion of revenue this year.

Revenue isn’t revenue isn’t revenue, however. Just ask Tesla. Here’s the story’s first paragraph:

Uber is a four-year-old mobile ride service company that could soon generate $10 billion of revenue per year.

That is a huge number, certainly. But which revenue number is it, $1.5 billion to $2 billion, or $10 billion? Well, none of the above, I don’t think. Keep in mind the data from October that TechCrunch covered: If Uber was on tip to make just over $200 million in revenue for itself on a yearly basis in October of 2013, how by December of the same year was it prepped to generate company-facing top line of $1.5 billion, let alone $2 billion, or $10 billion?

You pay Uber for your rides. It then takes a cut of that total spend, and that’s its take-home revenue. You can try and count the total spend on its platform as its revenue, but that’s as silly as Groupon trying to claim the full sale-price of coupons as its own top line. Ask Andrew Mason how well that went.

So Uber’s 20 percent is its revenue, and on a run-rate basis, that figure was nowhere near the billion dollar mark mere months before it supposedly was. I think that we are seeing a conflation of the term ‘revenue’ here.

If you repine for a moment, and scroll back to the initially leaked Uber slides, what was labeled as “revenue” was in fact considered to be total platform spend. To refresh you:


That $20 million or so per week is around $1 billion per year, given the number of weeks per annum. That’s how we treated what Uber called “revenue” in the past. Now, we appear to be willing to take what Uber called revenue mere months after the above, and presume that it means actual income for the company, and not total platform spend.

Again, revenue isn’t revenue isn’t revenue.

Unless Uber saw a growth spurt so fucking strong between those two months that it grew several-fold, we’re misinterpreting revenue. So, that means that Uber’s prior $20 million plus weekly revenue run rate wasn’t platform spend, but was instead its cut, and thus Uber was rocking a $5 billion platform spend run rate last October.

Well that or we’re just getting this confused today. Uber’s growth of 20 or 30 percent from October to a perhaps more busy December isn’t outside the realm of the reasonable. But here’s Business Insider on the December data:

In San Francisco, Uber generated $17.7 million, a run rate of about $213 million.

This implies that the company’s San Francisco revenue that month was roughly commensurate with its total forward revenue, calculated from October of that year. Or: That Uber’s ‘revenue’ in its slides concerning October was in fact total platform spend, and thus that Uber will likely collect around $40 million in revenue from the San Francisco market this year, extrapolating on a forward twelve-month run-rate basis from the new figures.

So, Uber will see well north of $1 billion in total platform spend this year. Perhaps even $2 billion, or $3 billion if things go well. That would put its own revenue in the mid hundreds of millions.

But keep in mind that Twitter is going to generate around $1.4 billion in revenue this year, and is worth $25.3 billion. If Uber was set to spank Twitter’s top line, why would it be worth less?

Oh, and if you count total platform spend as Uber’s revenue, it’s going to have shit GAAP margins. Something to think about.