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How Does Uber Make Money (Business and Revenue Model)

The Uber business model

How Does Uber Make Money?
Here’s what you should know:
  • What is Uber, and how does Uber work?
  • How does Uber make money?
  • Service Fees (From Drivers and Merchants)
  • Subscription Revenue (Uber One, Uber Pass, Eats Pass, and Rides Pass)
  • Uber Freight
  • All Other Revenues
  • Uber’s Subsidiaries, Acquisitions, and Exits
  • Uber’s profit and revenue
  • What is the Uber business and revenue model?
  • Uber’s funding and market cap

How does Uber make money? Here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Uber business model, their year over year revenue, and how Uber works.

What is Uber, and how does Uber work?

Uber is a rideshare company that has also expanded its transportation services into food delivery, shipping, and bike / scooter rentals.

Founded in 2009 by Garrett Camp and Travis Kalanick, Uber began trading on the New York Stock Exchange (NYSE) on May 10, 2019, under the ticker symbol “UBER”.

Now, Uber is the largest rideshare company in the world with a 68% market share of the rideshare industry.

Some of Uber’s competitors include Lyft and other rideshare companies.

Uber App in Apple App Store | Uber Business Model | How Does Uber Make Money? | How Does Uber Work?
Source: Apple App Store | Uber

How does Uber make money?

According to page 51 of Uber’s 2021 Form 10-K, Uber had 118 million active monthly platform consumers, 6.4 billion completed trips, and $90.4 billion in gross bookings in 2021.

So how does Uber make money off of all those customers, completed trips, and gross transactional volume?

Below is a breakdown of how much money Uber makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 4 ways of how Uber makes money (in 2022):

Uber has a revenue model that makes money in four (4) ways – service fees, subscription revenue, Uber Freight, and all other revenues.

#1. Service Fees (From Drivers and Merchants)

Uber makes the majority of its money by collecting service fees from, both, its drivers and Uber Eats merchants. Which, collectively, generated roughly $15.3 billion or 87.7% of Uber’s total revenue in 2021.

As noted above, Uber completed more than 6.4 billion trips in 2021. Of which, Uber collects a service fee, or commission fee, from each of those trips.

Uber Service Fees:

  • Driver Service Fee: Uber says it takes a 25% service fee, although some report it being higher
  • Uber Eats Merchant Fee: 15% to 30% fee for delivery orders, 6% fee for pickup
Uber Service Fees | Uber Business Model | How Does Uber Make Money? | How Does Uber Work?
Source: Uber

Note: Service fees in total (driver and merchant) combined for a sum of $15.3 billion or 87.7% of Uber’s total revenue in 2021.

[ Related Article: How Does Uber Eats Make Money? ]

#2. Subscription Revenue (Uber One, Uber Pass, Eats Pass, and Rides Pass)

Uber also makes money through the four (4) monthly subscription memberships they offer; Uber One, Uber Pass, Eats Pass, and Rides Pass. Which when combined, totals to more than 6 million paying members.

Uber Subscription Price:

  • $9.99 per month
Uber Subscription Price | Uber Business Model | How Does Uber Make Money? | How Does Uber Work?
Source: Uber

Note: Uber has over 6 million members paying for Uber One, Uber Pass, Eats Pass, and Rides Pass subscriptions.

#3. Uber Freight

In addition to service fee and subscription revenue, Uber makes another $2.13 billion from Uber Freight.

The way Uber Freight works is: Shippers must first enter shipment details such as the type of freight they will need (Dry Van, Reefer, Flatbed), pickup, and dropoff locations. In return, shippers will receive quotes for the next 14 days and have the option to book instantly. From there 24/7 support is available from the moment the shipment is booked to the time the carrier uploads the proof of delivery (POD).

Uber Freight costs vary based on the distance and travel time of each shipment.

Uber Freight | Uber Business Model | How Does Uber Make Money? | How Does Uber Work?
Source: Uber

#4. All Other Revenues

Uber makes the remaining portion of its money from what they call “all other revenues.” Which made up just $8 million of Uber’s total revenue in 2021.

All other revenues, according to page 96 of Uber’s 2021 Form 10-K, “primarily includes collaboration revenue related to our ATG business and revenue from our New Mobility offerings and products.”

Uber’s Subsidiaries, Acquisitions, and Exits

To date, Uber Technologies, Inc. has made a total of 13 acquisitions, 22 investments, 8 lead investments, and 5 successful exits.

Acquisitions
Source: Crunchbase | Uber

Uber’s profit and revenue

In 2021, Uber reported $17.5 billion in revenue.

Note: Because Uber Technologies, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Uber’s publicly released financial reports, including annual reports, through  Uber’s investor section on their website.

What is the Uber business and revenue model?

Uber makes money through a few revenue models that they combine within their company, they are:

  • Transportation as a Service (TaaS) business model
  • Subscription based business model
  • Transaction based revenue model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

Uber’s funding and market cap

According to Uber’s Crunchbase profile, Uber has raised $25.2 billion over 33 rounds and has a market cap of $62.53 billion as of April 2022.