I certainly don't begrudge Dara presenting a very rosy picture of Uber's recent performance on his Q3 earnings call this week. That's his job, and he's VERY good at it.
But as you point out, the recent revenue gains have largely been driven by price increases, and we're not likely to see anything like the 72% Y-O-Y numbers that Dara crowed about, in the months ahead.
In round numbers, Uber's Q3 2022 # of US ridehail trips is down around ~30% compared to pre-pandemic Q3 2019, but average fares per trip is up by about 40%. In essence, Uber is trading off growth for profits (AKA decreased net income losses).
Bottom line, Uber is still enjoying high growth rates in revenue and rides YOY, relative to depressed year-ago pandemic levels. But relative to pre-pandemic demand, Uber is JUST getting back to its 2019 ridehail revenue level (after correcting for their accounting change), mostly because of price increases to offset declining trip demand (the two obviously being related).
What this portends is that Uber will NOT be able to sustain their current admittedly spectacular YOY revenue growth rates for two reasons:
1. Future growth rates will be pegged to current recovering demand levels, not depressed pandemic demand
2. There are limits to Uber's ability to continue to raise prices, particularly if we hit a recessionary downdraft.
One other point... Your latest Oversharing post noted that:
"This is the new Uber normal. It’s also a sign that upfront pricing—a dynamic pricing algorithm that charges individual customers their willingness to pay using a variety of information Uber has on them and their trip, also known as sophisticated price discrimination—is finally paying dividends."
I have a strong suspicion that Uber is increasingly exploiting first order price discrimination on both sides of its marketplace. But Uber has steadfastly denied that they set rider prices and driver pay, based on INDIVIDUAL passenger/driver willingness to pay or drive. I'd love to see proof from Uber that backs up their claim, or proof from a third party that backs up my suspicion!
I certainly don't begrudge Dara presenting a very rosy picture of Uber's recent performance on his Q3 earnings call this week. That's his job, and he's VERY good at it.
But as you point out, the recent revenue gains have largely been driven by price increases, and we're not likely to see anything like the 72% Y-O-Y numbers that Dara crowed about, in the months ahead.
In round numbers, Uber's Q3 2022 # of US ridehail trips is down around ~30% compared to pre-pandemic Q3 2019, but average fares per trip is up by about 40%. In essence, Uber is trading off growth for profits (AKA decreased net income losses).
Bottom line, Uber is still enjoying high growth rates in revenue and rides YOY, relative to depressed year-ago pandemic levels. But relative to pre-pandemic demand, Uber is JUST getting back to its 2019 ridehail revenue level (after correcting for their accounting change), mostly because of price increases to offset declining trip demand (the two obviously being related).
What this portends is that Uber will NOT be able to sustain their current admittedly spectacular YOY revenue growth rates for two reasons:
1. Future growth rates will be pegged to current recovering demand levels, not depressed pandemic demand
2. There are limits to Uber's ability to continue to raise prices, particularly if we hit a recessionary downdraft.
One other point... Your latest Oversharing post noted that:
"This is the new Uber normal. It’s also a sign that upfront pricing—a dynamic pricing algorithm that charges individual customers their willingness to pay using a variety of information Uber has on them and their trip, also known as sophisticated price discrimination—is finally paying dividends."
I have a strong suspicion that Uber is increasingly exploiting first order price discrimination on both sides of its marketplace. But Uber has steadfastly denied that they set rider prices and driver pay, based on INDIVIDUAL passenger/driver willingness to pay or drive. I'd love to see proof from Uber that backs up their claim, or proof from a third party that backs up my suspicion!