Uber revenue $10 billion run rate in 2015, according to Henry Blodget
Adam Rifkin stashed this in Uber
What I'm hearing is that Uber's gross revenue is expected to hit a run rate of about $10 billion by the end of next year.
Uber keeps 20% of gross revenue and gives the rest to its drivers. So $10 billion of gross revenue would equate to $2 billion of net revenue.
Uber's revenue growth rate, meanwhile, is about 300% this year, and it is expected to be another 300% again next year.
Very few companies in history have grown at that rate at that scale.
Facebook is trading at about 10X projected 2015 revenue. LinkedIn is trading at about 8X. This is a point that Uber CEO Travis Kalanick made last summer in The Wall Street Journal, that Uber's deal was actually priced below the multiples of comparable public-market companies. Kalanick also recently said that Uber's revenue was doubling every six months.
Even if Uber's revenue growth suddenly slowed, so it doubled only once a year, or once every two years, the $18 billion valuation wouldn't seem extreme.
And then there's another statistic that I've heard.
Most of Uber's revenue comes from fewer than 10 cities.
Why is that startling?
Because Uber is now operating in more than 46 countries and 150 cities.
So, to recap (and add a few new tidbits), here's what I'm hearing about Uber:
* Gross revenue is expected to hit a run rate of $10 billion by the end of next year. This would be an increase of 300% over this year, which itself is an increase of 300% over last year.
* Most of the company's current revenue is coming from a handful of cities.
* The company is operating in more than 150 cities, so as these cities develop, revenue should grow at a prodigious rate for years.
* The average-rides-per-Uber-user-per-month are considerably higher than early investors expected. Thus, the revenue-per-user is higher than expected.
* Even the company's most mature markets, like San Francisco, are only partially penetrated.
* The company believes it has an opportunity to disrupt the massive rental car market, develop delivery services, and launch other businesses based on its existing infrastructure.
* Investors expect Uber to go public at a valuation of $50 billion to $100 billion in a few years.
From 2004 to 2012, industry observers ridiculed every successive increase in Facebook's private-market valuation. They dismissed its investors as stupid and declared the price the investors paid as proof of a new tech bubble. And they did the same with Twitter's valuations, and Google's valuations, as well as the valuations of many other internet companies. And yet, in the end, many of these valuations proved cheap.
If Uber's numbers are close to what I'm hearing they are, Uber's $18 billion valuation last summer, and the valuation of the new round now, may end up looking quite reasonable.
If we assume an average ride costs $20, they would have to do 500 million rides a year to hit $10 billion.
By the end of next year, they'll likely be in, say, 300 cities.
That would be 1.7 million rides per year per city.
That would be about 5,000 rides per day per city.
If each driver does 10 rides per day (they probably do a lot more), they would need 500 drivers per city.
That seems reasonable, no?
rename Uber to The Taxi Company.
Why? Uber wants to do a lot more than taxi-ing. They wanna do logistics!