I was commenting on the medium article linked which said...
In order to increase the value of the company, Basecamp has decided to stop
generating revenue. “When it comes to valuation, making money is a real
obstacle. Our profitability has been a real drag on our valuation,” said Mr.
Fried. “Once you have profits, it’s impossible to just make stuff up. That’s
why we’re switching to a ‘freeconomics’ model. We’ll give away everything for
free and let the market speculate about how much money we could make if we
wanted to make money. That way, the sky’s the limit!”
At $2B, I think the money talks. There's certainly some threshold where dollar amount matters. It's trivial to throw away a dollar. There are very few places that can afford to be as flippant with $2B. At some point, you're voting with dollars, and the percentage becomes much less relevant.
It's worth asking, if they have reached the point where their success becomes less about their execution, though that's still important, and more of a self fulfilling prophecy.
I mean you now have some very influential people to call on if you need help on navigating the IPO process, or government lobbying for rules changes, etc.
I've completely changed my mind on Uber, 18 months ago I would have felt nervous as employee joining them when determining if my options would be worth much. Now, I'd be asking if i could put 50% of my paycheck towards buying more options.
Steve Balmer was famous for acquiring as much Microsoft stock as he could, even after he became the CEO. I'd be mimicking Steve Balmer here and acquiring as much Uber as I could right now.
Definitely. It's one of the best reasons to pursue the famous venture capital firms. John Doerr has a lot of important people's phone numbers, and they will take his call (with the same obviously being true about maybe two dozen other famous investors). It's why Dropbox put Condoleezza Rice on its board. It's why Gilead had Donald Rumsfeld as its Chairman. It's why Theranos has an all-star line-up on its board.
Business is, always has been, and always will be, heavily about networks. You can do it without them, it's just drastically harder.
My understanding is that Uber is currently providing new hires with RSUs, not options (so valuation growth isn't necessarily necessary). I could be misinformed.
Your question about self-fulfilling prophecy is very relevant to a recent piece written by a transportation expert. Among other points he makes:
>Uber-type companies need to be understood as a radical departure from Amazon/EBay type models. Instead of displacing competitors through actual efficiencies, or by creating entirely new markets, its model is entirely based on getting the world to believe that it will inevitably dominate the entire industry. This requires aggressively suppressing any discussion of empirical economic evidence (which would undermine its case) and emphasizing the factors driving inevitability--the brilliance of its early stage investors, the ruthlessness of management, and the raw political power of the company’s wealthy supporters. PR is a component of every start-up; at Amazon/EBay it played a supporting role and relied heavily on economic evidence of competitive strengths, but at Uber PR is the heart of the plan, and replaces the need to figure out how to provide much better service at much lower cost.
I think they are creating a new market. People now use Uber in situations in which they never would have thought to take a cab. That is not to say this valuation makes sense
Perhaps so, but how substantial is that compared to the market of people who are just using Uber as a more convenient and reliable cab? Surely the latter is the vast bulk of their business.
currently but I can foresee a time when it is so convenient to hail a car that a lot of people just forgo car ownership entirely. Think of a future in which self driving cars work well and you can use your phone to get one to wherever you are within 10 minutes, get dropped off anywhere, never worry about parking and it costs far less than car ownership.
I can only speak for myself here but I feel like I am part of a new market that Uber and Lyft have created. I live in Austin TX and have had bad cab experiences here and so I frequently use Uber. I am from New York, however, and when I'm back there I almost never use Uber because I have no problems with getting a cab.
I would be surprised if the market for cab companies in Austin is as large as the market Uber serves. I really cant recall the last time someone here told me they got in a cab. I think those people just drove themselves places before Uber instead of taking a cab. I certainly did.
I live out in a relatively remote area of Queens in NYC and never, ever took taxis before (I would have had to call an unreliable, surly car service). Now I spend $100+ a month on Uber, which is never more than 5 minutes away.
OT, the "5 minutes" I believe is an estimation and one reason why we feel that the response is fast. As a thought experiment, if they say your car is "10 minutes" away, it would perhaps be a different experience.
This is very important, because I time my rides to the minute, and almost every time, the driver that accepts my ride is sitting in his living room (or at his office) and takes five minutes alone just to get to his car and start driving to my location. Drivers aren't just sitting there idling like taxis at a taxi stand.
Exactly. There is a market for people who want cabs and cant get them. Uber serves that market very well in some places AND steals market share from people who would normally take a cab.
I think that's my point. You previously would've used cabs, now you use Uber. Is Uber's value justified simply by the cohort of people who'd move away from using a traditional taxi service? I've been told no, that it requires a lot of people to do away with their vehicles and primarily use Uber, similar to a car share service but including the driver. I don't think that scenario is that likely to happen.
I previously did NOT use cabs in Austin. I had 2 bad experiences and just never tried again. Over the last year since I have relied on Uber so heavily I have actually sold my car. I still have a motorcycle and I use it for most short trips weather permitting. But if the weather is bad or I need to carry something with me that wont fit on the bike I use Uber.
My argument is that you're an abnormality. Have kids? Have pets? (Can you even get a child seat for use in an Uber) Not selling your car and using Uber for all your transportation needs.
Its a solution for 20 something singles. That's not a terribly huge market, and definitely not one worth billions of dollars.
Totally missing the forest for the trees. Uber has billions in revenue, so just on that alone the idea that the market is not worth billions is false.
Furthermore, they said the same things (20 something singles) about Facebook. Now my parents are on Facebook. The key is that Uber has the potential to change market behavior. Well, more than just the potential - it is changing some market behavior, as evidenced by this anecdote. The potential is that it has to potential to change the transportation spending habits of many more people.
Transportation is going to change regardless. Electric self-driving cars are going to be manufactured by several companies, perhaps operated by those same companies (or leased to others).
Why would Google provide its tech to Uber when Google already has access to the market through Google Maps? Why would Tesla provide its self-driving cars to Uber when it could build them and sell ridesharing directly (which Elon has specifically indicated he wants to do by his response to said questions during investor calls).
Uber is just an app, no more, no less. The Gorillas are the tech companies doing the real work.
In other words, Uber has the connections to unduly influence the government in a way to make sure they survive. Which is kinda the reason why people want things like taxi companies to fail. So is this a good or bad thing?
> I've completely changed my mind on Uber, 18 months ago I would have felt nervous as employee joining them when determining if my options would be worth much. Now, I'd be asking if i could put 50% of my paycheck towards buying more options.
Almost seems like this is the ideal point to join one of these unicorns.
I think Uber used their last round of funding to poach the entire Carnegie Melon robotics department for their self-driving cars, so it will be interesting to see they do with this $2.1 billion dollars.
Lyft "lost $127 million in the first half of 2015 on $46.7 million in revenue, according to the documents. Lyft said last month that it has gained market share in key markets, such as San Francisco, and has a gross revenue “run rate” of $1 billion."
I had no idea lyft was losing 3x the their revenue. That is crazy.
Anecdotal evidence, but I've hardly paid for a Lyft ride (aside from driver tips) for the last few months. This thanks to a long-running 50% off promotion in my area (Austin, TX, USA) and a pile of promotional credit added to my account. I wonder how much of this loss is due to these marketing efforts.
Now that the promotion is over and credit depleted, my default ride app is back to Uber.
I did the same thing as well. They kept claiming the promotion was about to expire, and then just created a new one. I'm waiting for another one to show up.
I am curious how the promotion will work out for them long term - I'm sure some people continue using the app after signing up (stickiness), but a lot of people likely switch back to Uber since it's cheaper.
Not to mention that for a long time, you could exploit a bug in the ride-splitting feature that allowed you to get free rides during the 50% off promotion. They applied the promotion as a credit and calculated the credit before the fare split.
It became a "verb" and well, here we know what that means: "xerox that paper", "google this term"... Nobody is Lyft-ing and everyone is Uber-ing. Once it's verbified, it's hard for competitors to overcome it.
I, for one, have used neither. But I have friends and family who travel a lot. Some are in their 20s, 30s, and some in the 60s and they all say they Uber places vs taking a taxi. They don't know about Lyft-ing.
Now what is the underlying reason for that. Maybe luck, maybe time to market, maybe pricing, I can't tell you.
Disagree that "most people Uber" is the reason Lyft is losing so much money.
I'm not exactly sure when Lyft stopped focusing on international markets to double down on the U.S., but I feel like much of the losses are from "failed" international experimentation.
With my experience in Ohio, I use both preferring whichever can reach me quickest (a 15-20 minute wait here is not abnormal).
Yeah I went by most people I know (some from Ohio too! btw, but they use Uber when traveling only to other cities) and extrapolated to "most" just by them being average Americans -- non techies, various ages,...
Most tech people I know have both apps installed and use both, like you do. But I don't think that's representative of the general population.
There's something to be said about the advantages of rapid expansion and being the first-mover.
It might be a shit show internally as any growth spurt might have but by the time Lyft tries to enter some of these cities (and that's an if) Uber will have already captured the entire market and it might be a very steep uphill battle to try and gain market share.
Well I am guessing paper copies are not as popular, printer became popular, and then well, not having paper at all became popular. But back in the day it was done a lot. And it was just an example of how some product turns into a verb. But we are not talking about a 20 year old company here. In 20-30 years will people be Uber-ing? I am guessing not. They somethingelse-ing....
Close to 1/10th of Apple's market cap, still a huge huge number. Nearly $2bn in revenue when reported by recode on August 2015. Facebook market cap was approx $81bn when launched. Probably once it will get closer to $100bn and then we will see an IPO.
Yet mostly still unregulated. I cant get over all the bad stuff they did to get where they are now. I am not defending taxi drivers (it seems that ANYONE against Uber business model = taxi supporter - at least according to majority of A/B society) but Uber is what corporations shouldn't be - breaking laws, throwing money to shut people and lobbying every politician they can. While I understand love by people that use it to make money or communicate, their whole model is just wrong and example of how corporation shouldn't be imo.
Regulation protects customers and workers. It ensure travellers don't get over charged compared to other forms of public transport, it makes sure the driver isn't a criminal, it ensures the vehicle is within certain standards, it prevents a free-for-all that would push the driver's income below reasonable levels.
I like the libertarian/wild west mindset of the internet. It doesn't however lend itself to integrated public transport systems - of which, private hire taxis are a part.
Plus, it is replacing local businesses with a multinational that will probably send its profits to an island (like lots of other technology companies), rather than contributing to local economies. I think it is the next Groupon though, so at some point it may pop.
Each driver did his best to cut costs and raise revenue like: break traffic laws, not pay for insurance, not service their cars, not clean their cars, etc.
And since hailing a cab doesn't really give a lot of consumer choice besides what cabbie happens to be driving by at the moment, "competition" is loosely applied at best.
Pre-regulation, this would mean chances were fair that you'd enter a cab driven by a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency.
At least according to Time magazine in 1976: Modern Living: Call Me a Taxi, You Yellow Cab!
And now the internet and mobile apps has changed all that. Now consumers can pick the best service and simply download a different app, and the services themselves can weed out bad drivers by looking at their ratings.
Seems to be working pretty well so far, especially compared to the highly regulated taxi industry.
"a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency" sounds a lot more like taxi drivers than Uber drivers (with the exception of "doesn't know the city", fortunately we have other mobile apps for that too!)
Technically, Google and Google Ventures have a Chinese firewall, and Google is competing against its own investment in Uber with its self driving cars.
The regulations often exist because of externalities to transactions. You don't directly have to deal with Uber, but you will still be impacted by their operations if they are in the same city.
Uber is now too big to fail. Possibly the most important company this decade. I never cease to be amazed by their phenomenal execution across the world.
I was in Mexico City last week where I truly came to understand the enormous impact Uber as a company has had in these past few years. The service was highly prevalent, popular, and the experience was completely seamless — just like in the US. It barely skipped a beat. Their execution is likely a prime business case study in that no other company has built a technology business that has a huge, real-life logistical component this fast — and in dozens of cities around the world, spanning an equal number of ways of doing business and cultural barriers.
Their spread, the value of the service, how they've completely transformed an industry. It's practically on its way to becoming a monopoly in many parts of the world.
I'd disagree with that. It is providing a means of income for many who are unemployed/underemployed. It's much better than nothing. It probably can be better, but most of these drivers aren't complaining.
But that can change quickly, history has lots of examples of how asymmetric power relations between the owners of the means of production and the workforce can end in conflict and a heavy push for a regulatory framework.
They aren't complaining yet because 1. they effectively have no collective voice other than social media, and 2. this "gig" industry Uber has propelled into the stratosphere is just too relatively new to see any significant societal fallout.
Wait until we see more and more drivers whose only job is Uber no longer able to work. What do we say to the veterans who, after being rejected everywhere else due to a dearth of skills took out a car loan on a new $60k SUV to drive for Uber, only now to get injured? Who's going to take care of them? Won't be Uber, who will just be shoving the middle finger in their faces. And I don't think you can call this a strawman, given how aggressive Uber is with vets.
Sure. But why don't we blame literally every other company who is worse and isn't giving any better opportunity. It would be fantastic if everyone had hundreds or thousands of options and they could compete for the best opportunity, but for some people that's not the case. I'd blame every other company before I blamed the one doing the most to help provide a compelling opportunity.
That would be a very financially-imprudent move, in any case. Just extrapolating from my car payment, that's like a $1200 payment. Moreover, are you going to make any more money from fares than if you had bought a used SUV at $20k?
> It's much better than nothing. It probably can be better, but most of these drivers aren't complaining.
This sounds strikingly similar to the working conditions undocumented immigrants encounter in US agriculture.
It's NOT better than nothing. In a proper first world country, you'd have a real safety net for people to fall back on instead of being exploited by shitty technology companies.
It is better than nothing. Consider the most extreme case, child labor (and I don't mean teenagers working at their parent's business). Enough people thought this was not better than nothing and thus pushed to end the practice. In some places this worked (more through economic pressure than laws if memory serves). The children who ended up with nothing found that they were worse off and many turned to the world's oldest profession to make money. They ended up worse off because nothing is worse than being exploited.
For the most part, the fares seem to gravitate toward uber. Drivers likely do better with uber than with local taxi cos who at times act like extortionists (kickbacks or no dispatches, car rental charges, medallion charges, etc.)
It's because they've replaced Facebook as the go-to company for describing your new startup. So, instead of saying 'I'm doing Facebook for gerbils' you have 'Its like Uber for buying marmalade' and so forth...
The interesting thing is they are still in the mailing DVDs phase of their Netflix plan. The company will almost assuredly be completely different in a decade or two when self driving cars are prevalent. Although it seems that exciting potential future is already priced into these valuations.
> a technology business that has a huge, real-life logistical component this fast
What? Nearly all the big and global freight/logistics operators like DHL, FedEx, TNT et al have a huge and sophisticated tech infrastructure to service their clientele and if I dare to say more advanced and demanding than what's in Uber's possession.
I think the point he's making is that they achieved this in a much shorter time frame and they basically used cell phones to accomplish it. The companies you listed have been around for decades.
I think Uber will fail, as will all other businesses that profit from bottling up the network effects of information.
Uber is so valuable because they control the network with the most riders and drivers. Their app isn't special. Their network is.
Decentralization shifts the profits of information network effects from companies to the public where they belong. We now have the technology to build decentralized application protocols that don't require a middleman to connect people for a fee. Instead, multiple companies will use the same network and compete to provide the best experiences. The profits to be had from facilitating networks will drop drastically when anyone can compete on a network no one controls.
Billions of dollars disagree with me, but I think those dollars don't see what's coming. Blockchains have kicked off a decentralization renaissance, and it's coming for everyone.
>The number is typically calculated by annualizing a recent week, month, or quarter of the company's gross revenue, which means actual annual revenue may differ substantially.
Maybe I am reading this the wrong way but in broader context of this article it reads as they are trying to say that the actual revenue may be much lower. They should explicitly say that for a growth company like Uber, the actual revenue # would be much larger.
If a company grows significantly in a year, the earnings for their most recent week would be more typical of their "size" than what they've made throughout the year. In that case, what they've made over the past year might not be a good indicator of what they'd make over the next year.
Uber, Lyft, Airbnb, etc. all typically report 'Gross Revenue' which is pretty misleading since the majority of Gross Revenue is passed through to the driver / apartment owner -- That may be what that sentence is in reference to. The interesting number is 'Net Revenue' which is how much Uber actually receives to pay their bills, etc.
Quick example, if 10 riders take an Uber and their cost is $20/each, Uber would report $200 in Gross Revenue. Since their driver split is something like 80/20, their Net Revenue would only be $40.
Funding rounds are usually preferred stock (though I hear Uber may have done some common stock in the last round, anyone know more?).
Preferred stock gets paid out first, so the actual "valuation" here is less meaningful. Preferred investors would still make a profit if Uber exited for $8B instead of 62.5B.
After the preferred money is paid out, the preferred stock converts to common stock at some multiplier. The multiplier is usually 1x, though it varies. At that point, whatever money is left is generally split between all common shareholders (investors and employees).
104 comments
[ 3.4 ms ] story [ 169 ms ] threadI get worried when more than 60 days goes by without them announcing a MegaRound(tm) at an InsaneValuation(R).
If they don't generate revenue then the sky is the limit!
https://signalvnoise.com/posts/1941-press-release-37signals-...
- some pretty famous angle investors
- some pretty famous venture capital funds
- some pretty famous investment banks
- some pretty famous private equity firms
- some pretty famous hedge funds
- some pretty famous mutual funds
It's worth asking, if they have reached the point where their success becomes less about their execution, though that's still important, and more of a self fulfilling prophecy.
I mean you now have some very influential people to call on if you need help on navigating the IPO process, or government lobbying for rules changes, etc.
I've completely changed my mind on Uber, 18 months ago I would have felt nervous as employee joining them when determining if my options would be worth much. Now, I'd be asking if i could put 50% of my paycheck towards buying more options.
Steve Balmer was famous for acquiring as much Microsoft stock as he could, even after he became the CEO. I'd be mimicking Steve Balmer here and acquiring as much Uber as I could right now.
Business is, always has been, and always will be, heavily about networks. You can do it without them, it's just drastically harder.
less upside and less downside.
>Uber-type companies need to be understood as a radical departure from Amazon/EBay type models. Instead of displacing competitors through actual efficiencies, or by creating entirely new markets, its model is entirely based on getting the world to believe that it will inevitably dominate the entire industry. This requires aggressively suppressing any discussion of empirical economic evidence (which would undermine its case) and emphasizing the factors driving inevitability--the brilliance of its early stage investors, the ruthlessness of management, and the raw political power of the company’s wealthy supporters. PR is a component of every start-up; at Amazon/EBay it played a supporting role and relied heavily on economic evidence of competitive strengths, but at Uber PR is the heart of the plan, and replaces the need to figure out how to provide much better service at much lower cost.
https://pando.com/2015/12/01/has-pando-missed-heart-uber-pro...
I would be surprised if the market for cab companies in Austin is as large as the market Uber serves. I really cant recall the last time someone here told me they got in a cab. I think those people just drove themselves places before Uber instead of taking a cab. I certainly did.
Interestingly 2 of the local cab companies now have Uber-like apps, which are quite nice to use.
Anecdotes!
Its a solution for 20 something singles. That's not a terribly huge market, and definitely not one worth billions of dollars.
Furthermore, they said the same things (20 something singles) about Facebook. Now my parents are on Facebook. The key is that Uber has the potential to change market behavior. Well, more than just the potential - it is changing some market behavior, as evidenced by this anecdote. The potential is that it has to potential to change the transportation spending habits of many more people.
Transportation is going to change regardless. Electric self-driving cars are going to be manufactured by several companies, perhaps operated by those same companies (or leased to others).
Why would Google provide its tech to Uber when Google already has access to the market through Google Maps? Why would Tesla provide its self-driving cars to Uber when it could build them and sell ridesharing directly (which Elon has specifically indicated he wants to do by his response to said questions during investor calls).
Uber is just an app, no more, no less. The Gorillas are the tech companies doing the real work.
Almost seems like this is the ideal point to join one of these unicorns.
I had no idea lyft was losing 3x the their revenue. That is crazy.
Now that the promotion is over and credit depleted, my default ride app is back to Uber.
I am curious how the promotion will work out for them long term - I'm sure some people continue using the app after signing up (stickiness), but a lot of people likely switch back to Uber since it's cheaper.
It became a "verb" and well, here we know what that means: "xerox that paper", "google this term"... Nobody is Lyft-ing and everyone is Uber-ing. Once it's verbified, it's hard for competitors to overcome it.
I, for one, have used neither. But I have friends and family who travel a lot. Some are in their 20s, 30s, and some in the 60s and they all say they Uber places vs taking a taxi. They don't know about Lyft-ing.
Now what is the underlying reason for that. Maybe luck, maybe time to market, maybe pricing, I can't tell you.
- Uber has no moral compass
That's pretty much it.
I'm not exactly sure when Lyft stopped focusing on international markets to double down on the U.S., but I feel like much of the losses are from "failed" international experimentation.
With my experience in Ohio, I use both preferring whichever can reach me quickest (a 15-20 minute wait here is not abnormal).
Most tech people I know have both apps installed and use both, like you do. But I don't think that's representative of the general population.
It might be a shit show internally as any growth spurt might have but by the time Lyft tries to enter some of these cities (and that's an if) Uber will have already captured the entire market and it might be a very steep uphill battle to try and gain market share.
And how much Xeroxing is done on Xeroxes?
I like the libertarian/wild west mindset of the internet. It doesn't however lend itself to integrated public transport systems - of which, private hire taxis are a part.
Plus, it is replacing local businesses with a multinational that will probably send its profits to an island (like lots of other technology companies), rather than contributing to local economies. I think it is the next Groupon though, so at some point it may pop.
Each driver did his best to cut costs and raise revenue like: break traffic laws, not pay for insurance, not service their cars, not clean their cars, etc.
And since hailing a cab doesn't really give a lot of consumer choice besides what cabbie happens to be driving by at the moment, "competition" is loosely applied at best.
Pre-regulation, this would mean chances were fair that you'd enter a cab driven by a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency.
At least according to Time magazine in 1976: Modern Living: Call Me a Taxi, You Yellow Cab!
"a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency" sounds a lot more like taxi drivers than Uber drivers (with the exception of "doesn't know the city", fortunately we have other mobile apps for that too!)
http://fortune.com/2015/05/22/uber-lyft-disabled/
http://www.wired.com/2015/08/uber-disability/
http://www.thedailybeast.com/articles/2015/05/21/uber-disabi...
http://time.com/3895021/why-the-disabled-are-suing-uber-and-...
I was in Mexico City last week where I truly came to understand the enormous impact Uber as a company has had in these past few years. The service was highly prevalent, popular, and the experience was completely seamless — just like in the US. It barely skipped a beat. Their execution is likely a prime business case study in that no other company has built a technology business that has a huge, real-life logistical component this fast — and in dozens of cities around the world, spanning an equal number of ways of doing business and cultural barriers.
Not saying that's good or bad. Just my opinion.
Wait until we see more and more drivers whose only job is Uber no longer able to work. What do we say to the veterans who, after being rejected everywhere else due to a dearth of skills took out a car loan on a new $60k SUV to drive for Uber, only now to get injured? Who's going to take care of them? Won't be Uber, who will just be shoving the middle finger in their faces. And I don't think you can call this a strawman, given how aggressive Uber is with vets.
This sounds strikingly similar to the working conditions undocumented immigrants encounter in US agriculture.
It's NOT better than nothing. In a proper first world country, you'd have a real safety net for people to fall back on instead of being exploited by shitty technology companies.
What? Nearly all the big and global freight/logistics operators like DHL, FedEx, TNT et al have a huge and sophisticated tech infrastructure to service their clientele and if I dare to say more advanced and demanding than what's in Uber's possession.
Uber is so valuable because they control the network with the most riders and drivers. Their app isn't special. Their network is.
Decentralization shifts the profits of information network effects from companies to the public where they belong. We now have the technology to build decentralized application protocols that don't require a middleman to connect people for a fee. Instead, multiple companies will use the same network and compete to provide the best experiences. The profits to be had from facilitating networks will drop drastically when anyone can compete on a network no one controls.
Billions of dollars disagree with me, but I think those dollars don't see what's coming. Blockchains have kicked off a decentralization renaissance, and it's coming for everyone.
Uber is now valued at 15.6 Lucasarts!!! Hooray and congrats to all involved in this grounded and logical valuation!
Maybe I am reading this the wrong way but in broader context of this article it reads as they are trying to say that the actual revenue may be much lower. They should explicitly say that for a growth company like Uber, the actual revenue # would be much larger.
Quick example, if 10 riders take an Uber and their cost is $20/each, Uber would report $200 in Gross Revenue. Since their driver split is something like 80/20, their Net Revenue would only be $40.
Preferred stock gets paid out first, so the actual "valuation" here is less meaningful. Preferred investors would still make a profit if Uber exited for $8B instead of 62.5B.