So there's two kinds of accounting, GAAP and non-GAAP.

A great example of non-GAAP accounting was WeWork's "community-adjusted EBITDA." When you use non-GAAP metrics to measure your business, you get to kind of define the standard by which you're measuring yourself. You get to do things exactly like the parent suggested, where you count 100% of the income as revenue and all your incentive spending as "marketing expenses."

Uber does this too, for instance (back when it was a thing) 100% of the sticker price of an Uber Pool ride was reported as revenue while only the 30% cut of an UberX or Uber Black was reported as revenue, and yes, they would list driver incentives as marketing expenses.

What Uber did is standard GAAP. Educate yourself on principal vs agent model.

Revenue is a well defined term and you can’t change the term just because you say “non-GAAP”. The SEC would step in because it’s obviously misleading.

Out of curiosity, which part, the Pool vs. X, or the driver incentives are marketing? Also, always happy to do some more reading especially if you have some references.

To be clear, Uber does use non-GAAP accounting in the form of both EBITDA and "segment-adjusted EBITDA", the latter of which excludes stock comp, platform operating expenses, corporate expenses, accounting, lobbying, etc.

Regarding the SEC, they are actually quite upset about the use of non-GAAP accounting, and have begun taking enforcement action against companies which give prominence to non-GAAP numbers.

Non-GAAP numbers are allowed when it helps clarify financial numbers for investors. The SEC will not allow anything to be called non-GAAP if it’s misleading. Saying revenue is $100 and shoving a discount as a marketing expense is fraud and accounting 101. There’s literally no room for interpretation. What Uber does with non-GAAP ebitda numbers has no bearing on this conversation. We are talking about straight up revenue recognition and the example given in the original post is well understood.

In terms of X vs Pool, it depends on the risk that the company takes. If Uber advertises a fixed price for the customer but they pay their drivers a variable cost (time and distance) then there is risk that Uber takes less money than they predicted or even a loss. That is the Principal model and they take the gross. To be extremely clear, this is what they are supposed to do under GAAP. If you look at their 10K which I’m guessing you haven’t, they don’t call the driver payouts a “marketing expense.” They call it “Cost of revenue”.

If they charge a % on the ride and there is no risk of revenues changing, it’s an Agent model and they take the net. I don’t know what the current model is, but I believe in California it’s the Agent model now. Pool used to be Principal a few years ago but again I think things have changed in California. Other countries will have different models so it’s on Uber to make sure their accounting is correct in all jurisdictions.

The fact that there are different models and reporting options, and that those options vary across space and time, as well as that the average retail investor and news report lack any real insight in to what's going on plays in to the whole obfuscation, melodrama, and financial hype.

Whether one believes this is ok or nor, or a good to necessary is, I guess, an ideological persuasion.

The SEC steps in typically when they're certain of a ruling in their favour and when it is politically expedient to do so.

In order for regulators to proactively prevent all misbehaviour such organisations would need to be impractical huge and financially inconvenient to tax payers.

Rather, society generally tolerates some level of fraud / crime / misbehaviour, probably because the benefits out weigh the costs to liberty.