ENTREPRENEUR

How much money do businesses like Uber and Netflix make a year?

How is a company like Uber losing so much money?

With Uber recently buying out its South East Asian and Russian competitors and Netflix pumping out nearly 90,000 minutes of original content last year it seems that these companies are earning a lot of money. It made me curious to find out just how much… 

Uber

You would struggle to find a start-up who has ever grown as fast, raised as much capital, been valued as highly or expanded as quickly as Uber.

They have 91 million worldwide users and are currently valuing themselves at USD$90-100 billion, so I expected them to be making a pretty massive profit.

To my total surprise, in its 10 years of operation Uber has never made a profit. In the first quarter of this year Uber had an estimated net loss of over USD$1 billion.

How is a company like Uber losing so much money?

Why is running Uber so expensive when after all, the company is famous for being so asset-light? What I mean… Uber drivers are not employees, they own their own cars, pay their own petrol, cover insurance.

So what are their expenses? They have to pay their drivers, taxes, refund customers, cover sales and marketing costs as well as pay their other employees. Uber recently said that the company “may not achieve profitability” as they expect these costs to increase.

Side note: The unethical culture and sexual harassment scandal surrounding previous CEO Travis Kalanick meant that Uber had to pay the current CEO an estimated USD$200 million just to accept the role.

But these losses also reflect an investment in the future of the company. Thanks to the new CEO, they are acquiring competitors, such as Yandex in Russia and Grab in South East Asia.

They also have big plans to make the Uber app a one stop shop for any of our transportation needs, from electric scooters to self-driving vehicles. At a recent summit, the CEO said Uber is willing to “take short-term losses in order to bring long-term business”.

So I guess, how much money the company loses depends on how you count costs and if you take into account non-cash costs (such as stock compensation). But, by every possible “real” profit metric, Uber is deeply unprofitable.

So, what jobs will be involved in the future of Uber?

Job one

Job: UX/UI Designer

What they do: Ensure that apps and products are user friendly, on brand, easy to use and functional

Average salary: $70,000-102,000

What you could study: Bachelor of Information Technology, Bachelor of Computer Science, Bachelor of Design, Psychology

Job two

Job: Strategy and Planning, Junior


What they do: Assess user data on apps to build a case for business change and manage the impact of change.

Average starting salary: $54,000

What you could study: Bachelor of Business, Bachelor of Economics, Data Science

Job three

Job: Automotive engineer 


What they do: Design, engineer, manufacture and operate automotive vehicles such as cars

Average salary: $84,000

What you could study: Bachelor of Mechanical and Automotive Engineering, Bachelor of Technology

These salaries are not specific to Uber and are general in nature.

Netflix

I knew Netflix was popular, but I was shocked to learn that over half of Australians have a Netflix subscription (56%), according to a recent survey by Roy Morgan. Netflix has completely dominated the landscape and they were valued at USD$152.9 billion in 2018.

With over 148 million streaming subscribers worldwide paying a monthly subscription fee, I assumed that the company was making a lot of money.

Do Netflix make a profit?

Technically, Netflix do make a profit – in 2018 they brought in a total of USD$16 billion in revenue. However, as competitors like Apple TV+ and Disney+ are preparing to join the race, Netflix are investing more money into their original content.

In 2018, Netflix produced almost 1,500 hours of original content leaving them with a free cash flow of negative USD$3 billion. In 2019, they plan to invest USD$15 billion into their original content.

What jobs will be involved in the future of Netflix?

Job one

Job: Content strategist

What they do: Researching and developing a content strategy based on the business objectives and the customer needs

Average salary: $60,000

What you could study: Bachelor of Media and Communications, Bachelor of Business, Bachelor of Economics (Marketing)

Job two

Job: Screenwriter

What they do: Write dialogue, characters and storyline of a tv show or movie

Average salary: $140,000

What you could study: Screenwriting Course, Bachelor of Arts, Bachelor of Media and Communications,  Bachelor of Theatre Media

Job three

Job: Content accountant

What they do: Ensure timely and accurate financial information specifically for content

Average salary: $93,397

What you could study: Bachelor of Accounting or Bachelor of Business, Finance or Economics with an accounting major

These salaries are not specific to Netflix and are general in nature.

How much money do businesses like Uber and Netflix make a year?
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