- Uber and Lyft Are Out of Ideas, Jacking Up Prices in Desperation for Profit (vice.com)
- Uber and Lyft’s New Road: Fewer Drivers, Thrifty Riders and Jittery Investors (wsj.com)
Quoting Aaron Gordon from the Vice motherboard piece:
Another common trick some public companies employ that Gordon's piece doesn't mention is companies excluding "Stock-based compensation expense" from their "adjusted" EBITDA" metrics, to make the adjusted numbers look better. Really: if you didn't pay those skilled employees and executives all that stock-based comp, how many of them would've just quit and gone to work somewhere else that does?Since their foundings in 2009 and 2012, Uber and Lyft have raised more than $30 billion in private funding, according to Crunchbase. Even with that pile of cash, neither company has ever posted a real and consistent profit, only “adjusted” profits that exclude dozens of real expenses every company has like taxes and interest payments.
Uber excluded $1.2b in stock-based comp expense in 2021 and $0.8b in 2020 from their "adjusted" "EBITDA" number. Similarly, Lyft excludes a $0.7b stock based comp expense in 2021 and a $0.6b expense in 2020 from their "adjusted" "EBITDA" number.
For anyone who doesn't mind pouring a drink and poring over SEC filings:
- link to Uber's 10-K filing for 2021 (sec.report), search for "adjusted EBITDA reconciliation"
- link to Lyft's 10-K filing for 2021 (sec.report), search for "reconciliation of net loss to Adjusted EBITDA"
(disclosure: much to my displeasure, i likely hold some positions in uber and lyft through passively indexed total market ETFs. i do not have short positions or put options in either stock, and have no upside if their share prices decline. they just seem like bad businesses)