By Staff at Shortreport.fyi in VIA — 16 Dec 2025

Via Transportation (VIA): Road to Nowhere – Chris Drose

Via Transportation (VIA) bearish research reveals 72% revenue from labor services, inflated metrics, software decoupling risks, and potential 60% downside as federal grants expire, challenging its software platform narrative.

Bleecker Street Research has published a comprehensive bearish report on Via Transportation (VIA), arguing that the company's public positioning as a scalable, software-driven mobility platform fundamentally misrepresents its true economics as a labor-intensive transit services contractor. The research reveals that 72% of VIA's revenue stems from traditional transportation services, driver and vehicle hours, rather than software licensing, while aggressive accounting practices and inflated retention metrics obscure weak customer durability. With federal COVID-relief and infrastructure grants set to expire around 2026-2027 and mounting evidence of customers decoupling software from operations, the report warns of significant downside risk.

Ticker: VIA (Via Transportation)
Position Disclosure: Bleecker Street Research holds a short position in Via Transportation and stands to benefit if the stock price declines.
Report Type: Bearish Equity Research
Original Source: Bleecker Street Research - Via Transportation Report

THESIS

The core investment concerns include:

Revenue Composition & Business Model Reality:

VIA derives approximately 72% of revenue from labor-intensive transportation services (driver/vehicle hours) versus only 28% from software, contradicting its SaaS platform narrative
The report documents that revenue growth is capacity-driven (more hours, more vehicles) rather than software-led, with minimal scalability characteristics
Review of over 100 contracts reveals pricing structures predominantly based on operational costs rather than software licensing

Aggressive Accounting & Inflated Metrics:

Large upfront implementation fees ranging from 31% to 153% of annual software fees artificially inflate year-one revenues and ARR calculations
Key variable costs including insurance and support expenses are classified in G&A rather than cost of revenue, overstating gross margins by an estimated 3-4 percentage points
Retention metrics (GRR >95%, NRR >120%) use non-standard definitions that exclude downsell scenarios and mask true customer churn

Weak Software Moat & Customer Decoupling:

Multiple major customers are actively decoupling software from operations, awarding software contracts to competitors like Spare Labs and Ecolane
The Remix planning tool is frequently provided free or used primarily as a bidding aid rather than generating recurring revenue
LA Metro Micro case demonstrates software can be easily separated and procured independently, undermining VIA's bundled value proposition

Grant Dependency & Funding Cliff:

Federal COVID-relief funds and IIJA infrastructure grants (~$8B/year) have funded 50-80% of pilot program costs but wind down around September 2026
Transit ridership remains at approximately 84% of pre-pandemic levels, increasing financial stress on agencies
Annual appropriations introduce volatility, with history showing short-term extensions rather than permanent commitments

Concrete Evidence of Customer Flight:

Baldwin County, AL: VIA contract terminated Q2 2025, services end Q3 2025, software awarded to Spare Labs
Ben Franklin Transit, WA: Despite November 2024 renewal, board initiated reassessment by November 2025, pursuing paratransit software RFPs
Hillsborough County, FL: VIA paratransit software contract terminated due to unmet functionality, awarded to competitor Ecolane
Hampton Roads, VA: VIA ceded paratransit operations
LA Metro: Renegotiated pricing from $42 to ~$24 per ride-hour and split software contract to external vendor

Valuation Disconnect:

Currently valued similar to Lyft at approximately 2.2x 2027E gross profit, implying software-like economics
Bleecker Street Research argues VIA should be valued as a services-heavy contractor at roughly 1.8-2.0x 2027E gross profit
Conservative analysis suggests potential downside of approximately 60% to a target price around $11.80

NOTABLE INSIGHTS & INTRIGUING DETAILS

Operational Realities:

The report analyzed over 100 local government contracts and more than 400 RFP processes to document VIA's true pricing structures
In Mobile, Alabama, approximately one-third of contract value was tied to operations (planning, scheduling, labor, maintenance) rather than software
Local support and live call centers are buried in G&A expenses rather than allocated to cost of revenue, masking true unit economics

Industry Competitive Dynamics:

Interviews with competitor executives (Spare Labs VP, RideCo Principal) and former VIA employees corroborate that VIA's software offering is secondary to services
Transit agencies increasingly prefer software-only or multi-vendor solutions to avoid vendor lock-in
VIA's control over both operations and optimization software is being actively questioned by procurement officials

Grant Funding Context:

Subsidy windows are typically 3-4 years; contracts initiated in 2021-2022 are now being reexamined for cost-effectiveness
IIJA expanded federal transit funding and COVID-era emergency funds accelerated pilots, creating temporarily favorable conditions
Fiscal scrutiny of transit funding, including highway-matching funds, could further tighten alternative funding streams

Customer Concentration Risk:

LA Metro remains VIA's largest customer, but the Metro Micro outcome demonstrates significant pricing pressure and reduced platform leverage
Multiple case studies (Milwaukee, Arlington, Palo Alto) show service reductions without clean churn events, indicating gradual downsizing vulnerability

Market Comparison Anomaly:

Despite labor-intensive economics more similar to traditional transit contractors, VIA trades at software-platform multiples
Uber and Lyft classify similar variable costs differently, making VIA's margin reporting non-comparable to mobility industry standards

FREQUENTLY ASKED QUESTIONS (FAQs)

What is Via Transportation's actual business model according to this research?

Via Transportation operates primarily as a labor-intensive transit services contractor rather than a software platform. The report documents that approximately 72% of VIA's revenue comes from traditional transportation services, specifically driver and vehicle hours, while only 28% derives from software licensing. This contradicts the company's public positioning as a high-margin, scalable SaaS business.

How does VIA inflate its software revenue metrics?

VIA charges large upfront implementation fees ranging from 31% to 153% of annual software fees. The report argues these one-time fees are frontloaded at contract inception to artificially inflate annual recurring revenue (ARR) and first-year revenues, disguising the true recurring nature of the income stream and exaggerating the software component of the business.

What accounting practices does the report identify as problematic?

VIA's accounting practices misclassify key variable costs by placing insurance and support expenses in general and administrative (G&A) expenses rather than allocating them to cost of revenue. This practice overstates gross margins by an estimated 3-4 percentage points compared to if the company used classification methods consistent with mobility industry peers like Uber and Lyft.

Are VIA's customer retention metrics reliable?

VIA's reported retention metrics (GRR >95% and NRR >120%) are calculated using non-standard, lenient definitions. These metrics exclude significant downsell data and undercount late churn events, thereby overstating customer durability and creating a misleading impression of software-like stickiness despite evidence of volatile customer engagement.

What is the "funding cliff" and why does it matter?

VIA's growth has been substantially fueled by federal COVID-relief funds and Infrastructure Investment and Jobs Act (IIJA) grants totaling approximately $8 billion annually. The research warns that these temporary funding sources, which have funded 50-80% of pilot program costs, are set to expire around September 2026. With transit ridership still at only 84% of pre-pandemic levels and agencies facing increased fiscal pressure, the report argues this creates significant risk of contract downsizing and revenue churn.

What evidence exists of customers moving away from VIA?

Multiple concrete examples of customer flight and contract restructuring:

Baldwin County, Alabama selected Spare Labs for software in late 2024, terminated VIA's contract in Q2 2025 with services ending Q3 2025
Ben Franklin Transit, Washington renewed VIA in November 2024 but by November 2025 initiated board discussions to reassess the arrangement and pursue paratransit software RFPs
Hillsborough County, Florida terminated VIA's paratransit software contract due to unmet functionality and awarded it to competitor Ecolane
LA Metro renegotiated pricing downward and subsequently split the contract, awarding software to a separate vendor

These cases demonstrate tangible shifts away from VIA's integrated model.

What is the "software decoupling" trend?

Emerging procurement trend where transit agencies increasingly separate software purchasing from operations contracts. The LA Metro Micro case exemplifies this: the agency maintained VIA for operations but awarded the software component to Spare Labs. The report argues this decoupling undermines VIA's bundled value proposition and demonstrates the software can be procured independently, weakening VIA's competitive moat.

How weak is VIA's software moat according to the report?

VIA's software moat is "weak and non-durable." The report notes that the Remix planning tool is often provided free (such as under Cal-ITP programs) or used primarily as a bidding aid rather than generating substantial recurring revenue. The research emphasizes that when software can be easily decoupled and awarded to independent vendors, as demonstrated in multiple case studies, the defensibility of VIA's technology offering is fundamentally compromised.

What valuation does the report suggest is appropriate?

VIA should be valued as a software-adjacent or services-heavy business rather than a pure platform play. A conservative valuation framework of approximately 1.8-2.0x 2027E gross profit is reasonable. Currently, VIA trades at multiples similar to Lyft (approximately 2.2x consensus 2027 gross profit), which the research argues is inappropriate given VIA's labor-intensive economics. Using this framework, Bleecker Street Research calculates potential downside of approximately 60% to a target price around $11.80.

What are the key risks to VIA's future revenue?

Several compounding risks:

Expiration of federal grants around 2026-2027 that currently fund 50-80% of pilot costs
Continued weak transit ridership recovery (84% of pre-COVID levels)
Increasing customer preference for software-only or multi-vendor solutions
Pricing pressure as agencies face budget constraints
Annual appropriations volatility introducing revenue uncertainty
Evidence of customers actively decoupling software from operations

These factors create elevated downside risk with limited upside potential.

How does this compare to other mobility companies?

VIA's unit economics more closely resemble traditional transit contractors than software platforms or mobility companies. Bleecker Street Research notes that companies like Uber and Lyft classify similar variable costs differently, making VIA's reported margins non-comparable. The report argues that while VIA is valued at software-platform multiples (2.2x gross profit), its predominantly service-based revenue (72% from driver/vehicle hours) and labor-intensive operations warrant significantly lower valuation multiples.

What role does the Remix software play in VIA's business?

Remix playing a secondary role that lacks durability. Remix is frequently used for bid preparation or provided free under various programs rather than serving as a scalable, stand-alone product generating substantial recurring revenue. The research argues this undermines VIA's narrative of having a durable software core that drives platform economics.

Has VIA disclosed any response to these concerns?

This summary is based solely on Bleecker Street Research's independent analysis. Readers should consult Via Transportation's official investor relations materials and public filings for the company's perspective on its business model, accounting practices, and customer relationships.

IMPORTANT DISCLOSURES

About This Summary: This document provides a brief overview of detailed equity research conducted by Bleecker Street Research. It is not primary research but rather a condensed summary of a much larger and more comprehensive analysis. Readers interested in the full methodology, supporting documentation, contract reviews, and detailed case studies should consult the complete report.

Original Research Credit: This analysis was authored by Bleecker Street Research, a detail-oriented equity analysis firm specializing in bearish equity research. The original report can be accessed at: https://www.bleeckerstreetresearch.com/research/via

Position Disclosure: Bleecker Street Research has disclosed that it holds a short position in Via Transportation (VIA) and stands to benefit financially if the stock price declines. This represents a material conflict of interest that readers should consider when evaluating the research conclusions.

Not Investment Advice: This summary is provided for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or a solicitation of any kind. Readers should conduct their own due diligence and consult with qualified financial advisors before making investment decisions.

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