Read the following article: https://techcrunch.com/2021/02/12/will-ride-hailing-profits-ever-come/ then answer the following questions. 1. The article notes Uber had never been profitable, yet at the time Uber had a market cap above $90 billion. What gives? 2. Uber lost approximately $7 billion in accounting profits in 2020. Is Uber’s producer surplus above or below this amount? Is Uber's economic profit above or below this amount? Explain. 3. How long can a company remain in business with negative accounting profits? What factors does this depend on? FilePage 1 of 1Home Insert Design Layout References434 words47°FPartly sunnyxAccessibility: InvestigateMailingsReview View HelpDocument2 - WordTell me what you want to doUber and Lyft lost a lot of money in 2020. That's not a surprise, as COVID-19 caused many ride-hailingmarkets to freeze, limiting demand for folks moving around. To combat the declines in their traditionalbusinesses, Uber continued its push into consumer delivery, while Lyft announced a push into business-to-business logistics.But the decline in demand harmed both companies. We can see that in their full-year numbers. Uber's revenuefell from $13 billion in 2019 to $11.1 billion in 2020. Lyft's fell from $3.6 billion in 2019 to a far-smaller $2.4billion in 2020.But Uber and Lyft are excited that they will reach adjusted profitability, measured as earnings before interest,taxes, depreciation, amortization and even more stuff stripped out, by the fourth quarter of this year.Ride-hailing profits have long felt similar to self-driving revenues: just a bit over the horizon. But after the yearfrom hell, Uber and Lyft are pretty damn certain that their highly adjusted profit dreams are going to comethrough.This morning, let's unpack their latest numbers to see if what the two companies are dangling in front ofinvestors is worth desiring. Along the way we'll talk BS metrics and how firing a lot of people can cut your costbase.UberUsing normal accounting rules, Uber lost $6.77 billion in 2020, an improvement from its 2019 loss of $8.51billion. However, if you lean on Uber's definition of adjusted EBITDA, its 2019 and 2020 losses fall to $2.73billion and $2.53 billion, respectively.So what is this magic wand Uber is waving to make billions of dollars worth of red ink go away? Let's hearfrom the company itself:We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations,net of income taxes, (ii) net income (loss) attributable to non-controlling interests, net of tax, (iii) provision for(benefit from) income taxes, (iv) income (loss) from equity method investments, (v) interest expense, (vi) otherincome (expense), net, (vii) depreciation and amortization, (viii) stock-based compensation expense, (ix)certain legal, tax, and regulatory reserve changes and settlements, (x) goodwill and asset impairments/losson sale of assets, (xi) acquisition and financing related expenses, (xii) restructuring and related charges and(xiii) other items not indicative of our ongoing operating performance, including COVID-19 response initiativerelated payments for financial assistance to Drivers personally impacted by COVID-19, the cost of personalprotective equipment distributed to Drivers, Driver reimbursement for their cost of purchasing personalprotective equipment, the costs related to free rides and food deliveries to healthcare workers, seniors, andothers in need as well as charitable donations.Q SearchWANALDO MORRISAMRIхв113%7:54 PM3/26/2023

Economic profit: It is a measure of a company's profitability that takes into account both explicit…

Read the following article: https://techcrunch.com/2021/02/12/will-ride-hailing-profits-ever-come/ then answer the following questions. 1. The article notes Uber had never been profitable, yet at the time Uber had a market cap above $90 billion. What gives? 2. Uber lost approximately $7 billion in accounting profits in 2020. Is Uber’s producer surplus above or below this amount? Is Uber's economic profit above or below this amount? Explain. 3. How long can a company remain in business with negative accounting profits? What factors does this depend on?

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC