I think that these effective consumer subsidies are included in their "sales and marketing" budget.
Promos and discounts are a core component of many (not all!) businesses.
Serious suggestion: try (your area code)-867-5309 and it will probably work.
That's not to say it's a bad thing that they are getting what they want. Not all data collection is an evil surveillance problem. Data can be useful for society too.
It isn't an achievement to gain 100% market share if each transaction makes a loss. If they try to raise prices to neutral or profitable levels it is likely that the market will shrink and competitors will charge in.
It may be that the equilibrium market is restaurants and food outlets do their own delivery for free or at cost. Then there isn't much of a market for a service like DoorDash to make a profit in.
It is possible that there is a market there and DoorDash will one day, somehow, make more money than they spend. But having a high market share is not much compensation when it requires constant losses to maintain.
My understanding is sometimes companies fudge the numbers though. If a $40 order has a $5 discount, they might consider $40 as revenue and put the $5 discount under a marketing expense
A great example of non-GAAP accounting was WeWork's "community-adjusted EBITDA." When you use non-GAAP metrics to measure your business, you get to kind of define the standard by which you're measuring yourself. You get to do things exactly like the parent suggested, where you count 100% of the income as revenue and all your incentive spending as "marketing expenses."
Uber does this too, for instance (back when it was a thing) 100% of the sticker price of an Uber Pool ride was reported as revenue while only the 30% cut of an UberX or Uber Black was reported as revenue, and yes, they would list driver incentives as marketing expenses.
Revenue is a well defined term and you can’t change the term just because you say “non-GAAP”. The SEC would step in because it’s obviously misleading.
To be clear, Uber does use non-GAAP accounting in the form of both EBITDA and "segment-adjusted EBITDA", the latter of which excludes stock comp, platform operating expenses, corporate expenses, accounting, lobbying, etc.
Regarding the SEC, they are actually quite upset about the use of non-GAAP accounting, and have begun taking enforcement action against companies which give prominence to non-GAAP numbers.
In terms of X vs Pool, it depends on the risk that the company takes. If Uber advertises a fixed price for the customer but they pay their drivers a variable cost (time and distance) then there is risk that Uber takes less money than they predicted or even a loss. That is the Principal model and they take the gross. To be extremely clear, this is what they are supposed to do under GAAP. If you look at their 10K which I’m guessing you haven’t, they don’t call the driver payouts a “marketing expense.” They call it “Cost of revenue”.
If they charge a % on the ride and there is no risk of revenues changing, it’s an Agent model and they take the net. I don’t know what the current model is, but I believe in California it’s the Agent model now. Pool used to be Principal a few years ago but again I think things have changed in California. Other countries will have different models so it’s on Uber to make sure their accounting is correct in all jurisdictions.
Whether one believes this is ok or nor, or a good to necessary is, I guess, an ideological persuasion.
In order for regulators to proactively prevent all misbehaviour such organisations would need to be impractical huge and financially inconvenient to tax payers.
Rather, society generally tolerates some level of fraud / crime / misbehaviour, probably because the benefits out weigh the costs to liberty.
If you sell something for $100 and give a future voucher for $80, you recognize $20 in revenue for this quarter and $80 liability on your balance sheet. In the next quarter when that voucher is used on another $100 purchase, you can claim $100 revenue this quarter and remove the $80 liability. But you already took the $80 hit to revenue from the voucher on the previous quarter.
If you sell something for $100 and immediately give a $80 refund then you only take a $20 revenue.
People think the SEC and accountants are dumb or blind but they aren’t. They have seen all of these tricks before and act very quickly if they see new ways to mislead.
Here's from the S-1:
> >> Our marketing efforts currently include referrals, affiliate programs, free or discount trials, partnerships, display advertising, television, billboards, radio, video, direct mail, social media, email, podcasts, hiring and classified advertisement websites, mobile “push” communications, search engine optimization, and keyword search campaigns. Our marketing initiatives may become increasingly expensive and generating a meaningful return on these initiatives may be difficult.