What is the value of those customers though? $3500-$12,000/year.
And as I understand the business model, it is really a realestate business so how of the value is in asset appreciation. If you’re buying real estate at pennies on the dollar and using cash flow to pay off debt, then $1.3B in losses may not be a big deal since you really need to look at LTV. If I put down $200k for a house in SF and take on debt for the rest then I am loosing a hell of a lot more money per occupant.
Why do so many articles compare WeWork and Uber per-customer losses? It's absurd on the face of it.
Per customer profit/loss comparisons only make sense when per-customer revenues (or at least lifetime value) are similar. A WeWork customer might be renting a small office for a year and worth >$25,000 in annual revenue. An uber customer might be worth maybe 1% that.
It would be better to compare WeWork per-customer revenues to companies like Regus or ServeCorp with whom they are actually competing.
I think the experience is generally worth the downsize - but if you need any kind of space - WeWork just isn't for you!
The real metric that matters is average payback period per property as a factor of the total rent liability.
The risk is WeWork's average payback period is never or they don't have enough cash to reach their payback period.