Instant Delivery Firm Jokr Is Leaving the US: Unit Profitability On Its Own Is Kinda Bullshit

A few months back (not years - thank you readers), Jokr said it was "unit profitable" in all of its major markets, including the US. So why then are they exiting the US market?

Well Warren Buffet is famous for saying that EBITDA is a terrible metric to live by when looking at investing in businesses.

He calls it "BS Earnings." Why?

It does not consider the cost of capital. Major infrastructure investments. So just because a company pushes lots of OpEx into CapEx, does not mean it is any more profitable.

Because that (razor thin, almost non-existent) unit profitability needs to subsidize those capital investments in the long-term. If the payback period is too long, then that unit profitability is not worth very much to anyone.

All it means is you have a different kind of unprofitable business.

I think a lot more businesses will find that they are in this situation. With people, buildings, etc.

Amazon is there too, and they are reportedly delaying construction projects and subleasing some of them, depending on what phase they are in.

Just a simple note as the cost of capital goes up to pay attention to the overall business, not just what the business looks like above the contribution margin.