Rapid Growth vs. Sustainable Growth

In the modern transportation ecosystem, growth can be accelerated through financial injections, extensive discounts, and substantial incentives. However, this type of growth does not necessarily indicate a healthy business model. Market experience shows that what ensures a platform’s sustainability is not the speed of expansion but its ability to absorb the real costs of growth. Sustainable growth requires transparent recognition of expenses, continuous investment in infrastructure, and acceptance of periodic losses, rather than concealing them in financial narratives.

Why Financial Narratives Matter in Ride-Hailing

As ride-hailing platforms expand and play an increasingly significant role in the digital economy, their financial statements become a primary source for investors, media, and regulators to assess their performance. Yet, superficial similarities in figures and charts can be misleading. Growth in ride numbers or apparent revenue increases, without understanding how income and expenses are recognized, does not provide an accurate picture of economic performance. Across different financial reports, the main differentiator often lies in the accounting logic underpinning the numbers.

The Role of Accounting Standards in Comparability

IFRS 15 emphasizes that platforms must first clarify their role in the value chain: are they the primary service provider or merely intermediaries between suppliers and consumers? This determination dictates whether revenue is recognized gross or net, whether discounts are treated as revenue reductions or marketing expenses, and whether certain payments can be capitalized or must be expensed in the same period. Without this framework, comparing financial performance across companies is effectively meaningless.

Different business and accounting models exist across ride-hailing platforms; this diversity is not the issue. What enables fair and meaningful comparison is transparency in how revenue, incentives, and costs are recognized and disclosed.

Independent Validation of Revenue and Incentive Recognition in Ride-Hailing Platforms

In this context, independent analytical reviews conducted by global accounting firms such as KPMG have examined how ride-hailing platforms in the Middle East recognize revenue and expenses in line with IFRS, including reviews of Jeeny’s financial model.

Recognizing Revenue Net, Not Gross

Under IFRS guidance, platforms operating as intermediaries between drivers and passengers recognize revenue on a net basis rather than gross. In Jeeny’s case, this results in recognition of net commission rather than total ride fare. While this approach may result in lower reported revenue figures, it provides a more accurate representation of the platform’s economic reality and allows for meaningful comparisons with other players.

Driver Incentives: Current Expense, Not an Asset

Across the ride-hailing industry, accounting standards require that driver incentives which do not create a distinct good or service be recognized as current-period expenses rather than capitalized. Independent reviews of Jeeny’s model confirm alignment with this principle. This approach emphasizes that the costs associated with maintaining supply and platform performance are real operational expenses and must be reflected in the period in which they occur to present an accurate and transparent financial picture.

Passenger Incentives and Discounts: Distinguishing Revenue Reduction from Marketing Expense

For passenger discounts and incentives, accounting treatment depends on the driver’s awareness of these benefits. If the driver is aware of the discount, it is treated as a revenue reduction; otherwise, it is recorded as a marketing expense. This distinction prevents demand acquisition costs from being artificially removed from the income statement.

Financial Transparency and the Interpretation of Performance

When incentives and discounts are consistently recognized in line with accounting standards, financial statements become a more reliable basis for interpretation. Clear disclosure of recognition logic enables stakeholders to distinguish between reported growth figures and the underlying economics of platform operations.

Competitive and Regulatory Implications

When companies in an industry report using different accounting logics, competition is removed from the path of operational efficiency. Presenting higher revenues or early profits through perceived advantages not rooted in actual performance creates an advantage not based on real operations. For this reason, regulators in many countries have concluded that financial reporting without clear disclosure of revenue and expense recognition is not a reliable tool for investor or regulatory judgment.

Conclusion

As the ride-hailing industry matures, the key question is no longer which platform has grown faster, but which ones report growth transparently and in line with recognized accounting standards without deferring or concealing the real costs of scale. Platforms that recognize the real costs of supply and demand acquisition in a timely manner may not appear profitable in the short term but provide a more accurate and dependable picture of business model sustainability.