Ride-hailing’s profitability promise is in its final countdown

After a short hiatus, The Exchange is back. We’ll spend part of this week digging into the global venture capital scene’s Q1 performance, but today, we’re kicking off with a quick dive into Uber, Lyft, Deliveroo and DoorDash — and the ability of on-demand companies of various stripes to generate profit.

Uber is our lodestone today because it dropped a new SEC filing that includes some notes on its recent performance. And, most critically, a piece of guidance for investors concerning its ability to make money this year.

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By “make money,” we don’t mean traditional net income on a GAAP — generally accepted accounting principles — basis. We mean Uber is providing its public investors with notes on its future adjusted profitability. Real profits are still somewhere out in the uncharted future.

So let’s parse Uber’s latest, vet its profit promise, consider its rivals and their performance, and then ask ourselves if the great ride-hailing and food-delivery booms will ever make back the money they cost to scale.

Uber’s planned profits

In 2019, Lyft told investors to expect positive adjusted EBITDA by the final quarter of 2021; at the time, Uber said it would generate full-year positive adjusted EBITDA. Those are slightly different (if related) promises. Later, Uber moved up its profitability promise to Q4 2020, but that was not to be.

After Uber changed up its profitability timeline, COVID-19 came. The pandemic forced the American ride-hailing company to revert to its previous adjusted profitability promises.

Uber and Lyft took huge revenue hits as their core ride-hailing businesses dried up faster than water on a Texas sidewalk after COVID-19 lockdowns took effect. In response, Uber fell back on its Uber Eats business, while Lyft had to get by without a second business line.