Thursday, November 16, 2023

If we love to do anything here at Calcbench, we love digging into the footnotes to excavate fascinating nuggets of financial analysis. So when Uber ($Uber) and Lyft ($Lyft) both filed their third-quarter earnings reports the other week, we got to work. 

At first glance, Uber dwarfs Lyft in almost every way. Most notably, Uber had roughly nine times the revenue as Lyft ($9.3 billion versus $1.16 billion) and almost the same multiple on total assets ($35.95 billion versus $4.48 billion). Uber also had a positive number for net income ($219 million) which is more than we can say for Lyft (net loss of $12.1 million). 

More than that, Uber also dwarfs Lyft on several non-GAAP metrics too. For example, Figure 1, below, shows total gross bookings — that is, the total amount paid for a rideshare trip, including taxes, tolls, the driver’s share of the payment, and everything else — for the last seven quarters. 

For those who don’t have a magnifying glass to make out Lyft’s numbers, average quarterly gross bookings for Lyft was $3.16 billion. For Uber it was $30.8 billion. On the other hand, Lyft’s gross bookings did rise 32 percent, compared to 33.4 percent for Uber — so even though Lyft is starting from a far lower floor, its growth in bookings has kept pace with Uber. 

Here’s where things get interesting, however. Gross bookings might not be the best comparison between Uber and Lyft, because Uber has multiple operating segments: Mobility (personal trips), Delivery (food delivery), and Freight, which is mostly logistics services to match carriers and shippers. Lyft, meanwhile, only reports a single operating segment of ridesharing. 

This means that some portion of those sky-high Uber numbers in Figure 1 aren’t really fair to Lyft. So can we get a more accurate reading of Uber’s gross bookings for Mobility only? 

We can! Dig into the Management Discussion & Analysis in Uber’s most recent 10-Q, and on Page 47 you find a table listing gross bookings by operating segment. See Figure 2, below.

This changes the proportions of the story, although not the basic plot. Even with those Mobility-only numbers, ranging from $10.7 billion at the start of 2022 to $17.9 billion in Q3, Uber still dwarfs Lyft’s numbers. 

OK, but what about comparing the number of trips for Uber versus Lyft? Can that tell us anything? Kinda sorta, but not really. 

Both Uber and Lyft do disclose the number of trips that their respective companies provide. Figure 3, below, shows the comparison, yet again with Uber dwarfing Lyft. 

The drawback is that Uber and Lyft define this metric differently. Uber discloses “trips,” defined as the number of completed rides for its Mobility and Delivery segments. Lyft discloses “rides,” which is the number of completed rides — but since it has no Delivery segment, comparing trips to rides isn’t an apples-to-apples comparison.

What we don’t have from Uber is a breakdown of its Mobility trips versus Delivery trips. If we did have that number, then we could make a fair comparison and answer another burning question: How much revenue is each company making per trip? 

Alas, Uber and Lyft don’t disclose sufficient numbers to let us draw any conclusions about that. They both do report revenue, obviously; but since they define “trips” and “rides” in non-comparable ways, we can’t really divide total number of trips/rides into revenue to derive a “revenue per ride” metric. Uber’s “trip” number would include food deliveries, while Lyft’s “ride” number wouldn’t. 

Lyft does give a few tantalizing hints in its Management Discussion & Analysis, with non-GAAP disclosures such as “Active Riders” and “Revenue per Active Rider.” Except, Lyft defines an active rider as someone who uses the service at least once per quarter; Uber discloses a “Monthly Active Platform Consumer” (MPAC) which is someone who completes either a Mobility ride or a Delivery order at least once per month

Maybe we could divide Lyft’s quarterly active users by three to get a rough estimate of monthly users, but we’d still be comparing Lyft’s rideshares against Uber’s rideshares and food deliveries. Is that a fair and useful way to calculate average number of riders, or average revenue per rider? We’re uncertain enough not even to try. Regardless, the point of this exercise was to show the range of non-GAAP disclosures that two comparable companies make, and the sorts of financial analysis you could at least begin to perform with those disclosures. Our Interactive Disclosure database has it all; with the right bit of sleuthing, you can go far.

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