Uber India’s Significant Revenue Growth and Loss Management in FY24

Uber India, an online mobility platform, has reported a remarkable 41.1% rise in its revenue, surpassing Rs 3,700 crore for the fiscal year ending March 2024. Despite this impressive growth, the company’s losses experienced a substantial reduction, shrinking by 71.4% in the same timeframe.

The consolidated financial statements of Uber India System Private Limited indicate that its operational revenue climbed to Rs 3,762 crore in FY24, up from Rs 2,666 crore in FY23.

Revenue Breakdown

In terms of revenue sources, earnings from Uber rides (ride-hailing) contributed 21.45% of the total operating revenue, rising by 18.9% to Rs 807 crore in FY24 from Rs 679 crore in FY23. The additional revenue stemmed from Uber BV, which generated income through engineering support services and back-office assistance billed under a cost-plus model.

The company also acquired Rs 99 crore from interest on current investments and other miscellaneous (non-operating) sources, bringing the total revenue to Rs 3,860 crore in FY24, up from Rs 2,744 crore in FY23.

Expenditure Insights

According to its consolidated statements, Uber India allocated 67.6% of its total costs towards employee benefits. This expenditure rose by 29.4% to Rs 2,690 crore in FY24 compared to Rs 2,079 crore in FY23. The cost of consumables in the previous fiscal year amounted to Rs 657 crore.

Legal and professional fees, advertising, rent, maintenance, safety, security, and various overheads contributed to an overall expenditure increase of 26.4%, totaling Rs 3,977 crore in FY24, up from Rs 3,146 crore in FY23. For a detailed breakdown of costs, various sources are available.

Financial Performance

As a result of the over 40% revenue growth and meticulous spending, Uber India’s net losses contracted by 71.4% to Rs 89 crore in FY24, compared to Rs 311 crore in FY23. On a unit basis, the company spent Rs 1.06 to generate every rupee in FY24.

While Uber India resembles a mid-tier software company with constrained margins and a segment that hampers overall performance (the cab services), it appears closer than ever to achieving profitability, especially if it successfully acquires Blusmart Mobility, as suggested by some reports.

Even without this acquisition, many observers find it astonishing that the company continues to incur losses, particularly given that it has lagged in service quality and driver satisfaction compared to its peak. Although the firm has had to innovate its business model over time, the impact it has on numerous cities across India as a service provider raises questions about its financial performance, which many would deem unsatisfactory. Selling software services to its parent company has been a temporary solution to mitigate challenges faced in India, but this situation may not elicit sympathy from customers. It is perplexing that the firm struggles in this market and often faces criticism.

As Uber India celebrates its twelfth anniversary in the country, there are hopes for a significant breakthrough in its financial sustainability, ethical standing, and operational efficiency.