"net loss of just $318,000 in 2022"
"earned $5.9 million in revenue from 162,294 successful trips — and $5.2 million of that went directly to driver wages"
Let's do the math: they earned $700K in net revenue and lost $318K - for a margin of -45.43%... sounds grim...
But... if they can double the net revenue to $1.4M while only growing costs 25% to 1.3M then voila they're breakeven/ramen-profitable...
I don't quite understand the logic here.. the 5.2MM wasn't fixed costs, that was costs of goods sold because they needed to provide the service to earn in income.
So as far as I can tell they lost 318K, but they don't need to grow gross revenue by very much to close the profitability gap.
Exactly: if they double total revenue then NET revenue (after driver payouts) only grows to $1.4M
Sounds awesome but currently the net revenue was 700k which means they spent ~$1mm on other stuff besides driver payouts. Some of that will grow with the business (e.g. customer service, server hosting costs), some is fixed (e.g. you only need one CEO).
If they can grow the revenue without also growing expenses then they'll hit breakeven by ~doubling revenue, maybe more, maybe less.
Interestingly, i just checked their prices to JFK and they're about the same as Uber. So if they grow beyond breakeven, then they could undercut Uber's current prices...
They developed a new app and essentially built the business in 2022, I am going to expect that the vast majority of the $1MM is fixed and one-time costs. (Obviously they are amortizing the app cost.. but nonetheless.)
But regardless of that if you are launching a new service business and you've got $5MM is sales and you need to hit $8MM in your second full year of operation to become profitable, I'll call that almost profitable!
It says they took in $1.6M of crowd funding. Not sure what the repayment terms are but presumably less predatory than VC. That gives them a few years of runway. And this is a non-profit, so "ramen-profitable" is probably the end goal. Every penny past break even just goes into the cash reserves.
"net loss of just $318,000 in 2022" "earned $5.9 million in revenue from 162,294 successful trips — and $5.2 million of that went directly to driver wages"
Let's do the math: they earned $700K in net revenue and lost $318K - for a margin of -45.43%... sounds grim...
But... if they can double the net revenue to $1.4M while only growing costs 25% to 1.3M then voila they're breakeven/ramen-profitable...