Via Transportation (NYSE:VIA) shares dropped about 2% on Tuesday after short seller Bleecker Street Research published a report questioning the company’s positioning as a software platform.
In the report, Bleecker Street argued that Via’s operations resemble those of a labor-intensive transit contractor rather than a technology-driven platform business. The firm said its review of more than 100 contracts tied to the $2.4 billion company suggests that revenue is primarily generated from service hours, driver labor and vehicle usage, rather than software licensing.
According to the short seller, Via’s main avenue for revenue growth often involves municipalities increasing the number of vehicles and drivers deployed in transit programs instead of purchasing additional software capabilities.
The report also pointed to pricing pressure in some key accounts. It said certain customers, including LA Metro, have negotiated lower pricing in recent agreements or replaced Via’s software with alternative solutions from competitors such as Spare Labs.
Bleecker Street further questioned the durability of Via’s revenue streams, claiming that many new deployments depend on temporary federal grants or pandemic-related relief funding. Citing two former employees, the report said roughly 10% to 20% of customer churn was linked to expiring grants, while between 50% and 80% of pilot program costs were supported by federal subsidies. The report warned that budget constraints could intensify beginning in 2026 as pandemic-era relief programs phase out.
The short seller also criticized the company’s accounting approach, alleging that Via records large implementation fees and up to 18 months of software-related charges upfront, which it said could inflate reported annual recurring revenue. In one example cited in the report, a cooperative purchasing agreement included upfront software fees representing between 31% and 153% of the contract’s total first-year value.
Additionally, Bleecker Street claimed that Via excludes certain variable costs—such as insurance—from cost of revenue and does not clearly separate support costs from general and administrative expenses. The report suggested that this accounting treatment may lead to gross margins appearing stronger than those reported by peers such as Uber and Lyft.