Taxi Driver Online

These figures don't really mean much, for two reasons. They're for 2022, so the comparative year of 2021 would have been compromised by lockdown. So comparisons not really that meaningful.

And because of the VAT stuff, turnover has rocketed, because they now record £100 (say) in fares as turnover, while previously it would have just been the commission element - £20 or whatever.

But the bottom line (literally, in this case) is that profits have increased six-fold, so that looks like a considerable advance for Uber UK


Uber lifts the lid on UK revenues for first time

https://www.thetimes.co.uk/article/uber ... -whkmb8bwm

Uber has lifted the lid on the size of its business in the UK for the first time, revealing £3.4 billion of revenue last year.

The American app operator made £2.6 billion of sales from its ride-hailing business, with a further £700 million from its food delivery business Uber Eats, which ferries takeaways from restaurants and groceries from supermarkets.

The numbers, revealed in accounts for the year to December 2022 filed at Companies House, show the total amount that Uber takes in orders, before the money is split with drivers and restaurants. It is the first time Uber has given a clear picture of its UK business since it implemented changes to its structure in March.

Uber was forced to alter its business model last year after a Supreme Court ruling in 2021 on a case brought by drivers, who had demanded recognition as full-time workers. The court found in their favour, ruling that the company was a transport provider and not merely a “middle man” between users and drivers. As a consequence of that, Uber now books all the revenue from its fares, rather than just a portion.

In addition, the company has stopped routing UK revenue via its Netherlands business.

Uber’s UK holding company made a pre-tax profit of £32 million last year — a significant jump on the £5 million it reported the year before. Revenue of £3.4 billion represented a 2,992 per cent jump on the £108 million it recorded the year before. The company paid £4.3 million in tax, at a rate of about 13 per cent. It is thought that Uber’s tax rate was lower than the standard 19 per cent during the period due to advance payments it had made to HM Revenue & Customs prior to the pandemic, when taxi rides plummeted.

The change in the annual accounts makes it hard to gauge the trend of Uber’s progress in the UK. However, the company conceded it was operating in a “highly competitive” environment, with drivers routinely jumping ship to rival platforms where they can earn more. Uber drivers often work for rival apps such as Bolt and Free Now. As a result, Uber raised pay for drivers last year.

Uber, which has long been criticised over its workers’ pay and conditions, admitted it had “previously received significant media coverage and negative publicity” but said it had taken “significant steps to rehabilitate our brand”.

The company also warned that the small businesses in its delivery network could be hit by “any decline in consumer spending” amid poor economic conditions. Its food delivery arm competes closely with Just Eat, which had turnover of £1.2 billion in its UK and Ireland business in its last reported year, and Deliveroo, which had revenues of £1.1 billion.

As the changes to Uber’s model took effect at the end of March, its accounts provide only a snapshot of the business for three-quarters of the year. It means turnover is likely to jump again in 2023, the first full year of the changes.

The company has more than 90,000 drivers nationwide. Uber said: “Uber launched in the UK more than ten years ago and has created hundreds of thousands of earnings opportunities. We regularly move over five million Brits around towns and cities, making the UK one of Uber’s most important global markets.”

SPin,Spin and more spin Alastair campbell would be proud !

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Interesting they do this now, and I suspect they would rather not have had to break down their UK numbers.

The £32 million looks great, but aren't they facing having to pay vat on 100% (like all other operators) on their fares, rather than the current 25% taken from drivers?

So that is £2.6 billion, less the 25% they currently pay, £1.95 billion. The vat on that is £390 million.

Clearly numbers are rough, but I put that at a potential £360 million loss.

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IDFIMH

Sussex, the turnover figure should be net of VAT, so any figures shown in the profit and loss account will be after VAT, so in terms of the net profit figures it's probably best to ignore the VAT aspect.

(For example, if the VAT rate meant that £100 in fares included £20 VAT, then turnover would be shown as £80.)

Ignoring VAT, and assuming the commission rate was 20 per cent, then £100 in fares paid by a customer before the VAT thing would have been shown as turnover of £20 in Uber's accounts - ie the commission paid by the driver to Uber.

Now the £100 would be shown in Uber's accounts as turnover, and the driver's £80 shown as cost of sales, or whatever, so gross profit would still be the £20.

But that's what I can't understand in the newspaper report above. It's basically saying turnover increased x30, largely due to the VAT change and how it's disclosed in the accounts. But if that would only mean turnover increasing by four or five times, or something like that, assuming levels of business were similar between 2021 and 2022.

Of course, turnover very probably increased substantially because 2021 would have been more affected by lockdown, but not by the magnitude suggested, so the figures don't ring true, somehow. But I'm no doubt missing something, and it's all a bit opaque

And, Edders, I was about to ask you about spin, since it's a pretty straight bat newspaper report on a set of statutory accounts, and there's no obvious creative accounting in play, or whatever. And the report isn't really wholly sympathetic to Uber.

But, to be fair, I didn't put the link to the article in, because it was paywalled, so you wouldn't have known the source.

But, in turn, that's why I generally include a link to the source, because it helps, er, contextualise it.

Of course, lots of press reports simply rehash an official corporate/council/press release, or whatever, but can't see any real evidence of that here, so to that extent it's just an objective press report on a set of statutory accounts, the content of which is required by law and independently audited.

(I've put the link to the Times report in now.)

I wasn't talking about the newspaper

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Ignoring the VAT thing (as I suspect the back tax will be expressed as an exceptional payment, or whatever the posh wording is for this), how can Uber's UK expenses be so high?

They say taxi/PH turnover was £3.4 billion. The average commission is about 25%, so they should have made about £850 million, less expenses.

Their declared profit was £32 million, so are we really being expected to believe their UK operating costs are £818 million?

Just for the mobile section.

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IDFIMH

Of course they don't make profits in the Uk because that would mean they have to pay tax ! The profits mysteriously appear in the country with the lowest tax rate.

Oh and that isn't unique to Uber is it Apple, microsoft,Ineos,Dell,Glencore and a hundred other of the worlds biggest companies we could ask !

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Sussex, the £3.4 billion turnover includes the delivery side as well.

The 'taxi' side is called Mobility in the accounts, and these are the turnover and cost of sales figures:

Turnover: £2,633,963k

Cost of sales: £2,230,013k

So that's only 15.3 per cent of fares left for Uber, effectively. I'm assuming turnover is essentially total fares, and that cost of sales includes the driver's proportion of fares, but according to the accounts (page 31) it also includes card processing fees, bank fees, insurance fees, data centre and mobile device costs etc etc.

But to get to the pre-tax profit figure, the 'administration expenses' for the combined 'taxi' and delivery sides is £588 million, so you're right - it's a huge pile of money, and difficult to work out what it represents.

And the only real detail available is that the £588 million of administration expenses includes staff costs of £41 million, which doesn't seem much - I'd have expected staff costs to represent a lot higher proportion of total administration expenses.

The only other separately disclosed expenses are chickenfeed.

So, essentially, all the detail that might be useful isn't disclosed in the figures. Compare that to the Taxation note 7 starting on page 33, and covers about a page-and-a-half, including detail on deferred tax and 'reconciliation of tax on profit' - what a hoot

So a shedload of irrelevant detail - even, I suspect for financial analysts - but the detail that analysts might be a lot more interested in just isn't there.

But to an extent that's what statutory accounts are all about - lots of stuff to be disclosed and the right boxes to be ticked, but the real detail on financial performance is to a large extent hidden. Of course, this is probably at least partly due to commercial sensitivity, and that forcing companies to disclose too much detail would help competitors.

But for our purposes, it's quite interesting that Uber's accounts just use the simple term 'drivers', and none of this driver-partner nonsense, or whatever

Link to accounts here:

https://s3.eu-west-2.amazonaws.com/docu ... 85c54e14f4

If that link doesn't work, it's the top document on this page:

https://find-and-update.company-informa ... ng-history

Don't forget that they will allocate the interest on a big chunk of debt to the UK operation.

and also a proportion of corporate HQ costs and of course miscellaneous "finance and legal" charges

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

Indeed, Edders, that's the thing. There's zero detail that I can see about that kind of stuff, and all such charges are subsumed under the 'administration expenses' figure

(Maybe there is something in the narrative about allocation of cross-group expenses, but unfortunately the accounts document isn't searchable, and I can't be bothered wading through it all.)

And another thing about statutory financial accounts these days is the amount of narrative required about corporate social responsibility and suchlike, so while there's not much numerical detail (except for the likes of deferred tax ), there's lots of opportunity for PR and bullshit

Had a quick read of some of it, though, and some is quite interesting from the trade's perspective, such as reputational risk from, er, 'safety incidents' and suchlike, although it's all a bit understated, for obvious reasons.

And a surprising amount of detail about certain stuff, such as that riders are advised not to sit in the front if possible, and drivers shouldn't ask riders to sit in the front. Because sitting in the front increases the risk of, er, 'safety incidents', or at least that was what Uber's 'data suggested'

Also the likes of this: "Safety risk - Platform users may engage in, or be subject to criminal, violent, inappropriate or dangerous activity that results in major safety incidents, which may harm our ability to attract and retain drivers and end users."

All pretty obvious, I suppose, for people who know the trade well. But unusual to see it all written down like that. But in terms of the accounts, it's all about assessing the company's risk in terms of future financial performance and as a going concern, blah, blah.

An interesting new innovation from November 2022, though, and something that's been mentioned once or twice on here - ie fixed price fares attracting the pish-takers doing multi-stops etc:

"'Multi-stop compensation' allows drivers to see on their upfront offer card if their journey has more than one stop, and also allows drivers to earn more after 3 or 4 minutes at each stop (subject to the product option they are using)."

Quite sure me and others on here foresaw the trouble that fixed fares would cause when it was introduced, but of course the MBAs and business grads that Uber employs wouldn't foresee that kind of thing