Breaking Down Uber’s Valuation: An Interactive Analysis
Uber is one of the world’s most valuable private companies, driven by its soaring revenue growth and expansion into new markets. Uber has been actively prepping for an IPO (likely in 2019), focusing on cutting its losses by divesting underperforming operations and improving its operating metrics. We have created an interactive dashboard analysis breaking down the company’s reported $48 billion valuation (based on its most recent fundraising in December, though valuation reports vary) using revenue metrics including monthly active riders, the number of rides per rider per year, revenue per ride, net revenues and price to sales multiple. You can modify our forecasts for 2018 to arrive at your own estimate for Uber’s valuation.
Uber’s monthly active riders grew from 50 million in 2016 to 75 million in 2017, with the number of rides hailed by each rider also trending higher. We expect monthly active rider growth to remain strong in 2018, as Uber doubles down on emerging markets, taking total rides delivered to ~5.5 billion this year. Note that the sources for this data and our estimates are listed at the bottom of this note.
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Gross revenues could cross $50 billion in 2018 as the number of rides delivered soars, although revenue per ride may remain at similar levels. Gross revenues are the total value of the rides billed to customers before Uber takes its cut.
Uber’s share of the gross revenues has declined due to its aggressive promotions and partner incentive payouts. However, the company has taken steps to reduce incentive payouts and it is possible that its share of revenues could stabilize in 2018.
Softbank made an investment in Uber at a valuation that was reported at about $48 billion in late 2017. We have used this metric to arrive at a 2018 revenue multiple of about 4.6x for the company. The company could be assigned a higher or lower multiple, based on its growth prospects and perceived risk.
Data Sources:
Monthly Active Riders:
- 2016: Uber reported 40 million riders in October 2016, Extrapolated this to 50 million at end of the year.
- 2017: Recode
Number of Rides Per Year:
Gross And Net Revenue:
Valuation Multiple:
- Derived From Softbank investment at $48 billion in late 2017.