Uber's Balance Sheet Tricks

Jon York

Member
Nov 30, 2018
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What City & State do you work in?
New York City
We've all heard that Uber's losing money... BIG money. But did you know every financial report they release, they pick a different set of accounting practices to show their finances with? This is what fraudulent companies do. Instead of playing by the same rules every quarter they change the rules to whichever set of rules makes them look best for that quarter. And here's the kicker... even with changing the rules whenever they like to put themselves in the best possible light - they're still losing $4.5 billion a year!

Good article on this subject - here's an excerpt:

As ever, Hubert Horan is the best source on Uber Financial Kremlinology; since I wrote about his initial five deep dives in 2016, he's written eight more -- the latest one is where I found about about these balance-sheet shenanigans.

"All previous releases of Uber revenue data were limited to the top-line “Gross passenger payments” (the total money paid by passengers) and “Uber revenue”, the 20-30% of that total retained by Uber. In past analysis, I had assumed that the difference went almost entirely to drivers, but the newly released data shows this assumption is not true, and that Uber may be inflating the top-line revenue number.

"In 2017, roughly $3 billion[8] of this revenue was “Refunds, Taxes and Fees” or “Rider Promotions.” Government charges and fares that are refunded should not have been included in the original gross revenue number. The “Rider Promotions” item is more problematic.

"If Uber offered discounts, the higher fare (that the passenger did not pay) appears to be included in gross revenue, while the promotional discount is a separate offset.[9] These numbers do not affect bottom line P&L calculations, but inflating the top-line gross revenue number directly supports Uber’s desire to show the strongest possible passenger demand numbers. Uber has steadfastly refused to release any numbers (such as market-specific fare and yield trends) that would meaningfully document whether (or where) its revenue performance might actually be improving."
 

Graham

Member
Feb 4, 2019
141
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What City & State do you work in?
Glendale AZ
Hmm,seems like Uber is suffering from what I like to call the 'law of Starbucks.' Stupidly-fast expansion almost always means lots of scaling back later; sometimes not much later.