How much of Shift Technologies revenue comes from haram?

Shift Technologies provides an online marketplace for buying and selling used vehicles.

The company earns its revenue from the following segments: 

Ecommerce Vehicle Revenue:

Includes revenue generated from selling used vehicles directly to consumers through the company’s website. 

Other Revenue:

Includes revenue generated from commissions earned from agreement contracts with third-party financing vendors offering their services on Shift’s platform. Shift also earns loan revenue through a margin on the lender’s interest rate.

In addition, Shift earns revenue through offering purchasers of its vehicles service contracts and prepaid maintenance plans.

Wholesale Vehicle Revenue:

Includes revenue generated from auctioning vehicles that don’t meet Shift’s quality standards to list on their website. 

The contributions from each of Shift’s revenue segments in their latest annual report were as follows:

An area of concern for Practical Islamic Finance is Shift’s “other revenue”, particularly revenue earned from referring customers to third-party lending vendors, which represents 3.3% of total revenue. While this percentage has not been drastically increasing in the past couple of years, investors will have to monitor this percentage closely and see if it grows as time progresses. 

Practical Islamic Finance concludes:

Only a non-material portion of Shift’s revenue comes from haram. 

Does Shift rely on interest to operate?

Year-to-Date
for period ended
6/30/2021
Fiscal year
ended
12/31/2020
Fiscal year
ended
12/31/2019
Interest Income (net)
Total Revenue $260,854$195,718 $166,235
Interest Expense (net) $2,696$7,646 $3,784
Total Expenses $338,198 $271,969$243,078
Interest Income (net) / Revenue
Interest Expense (net) / Total Expense0.80%2.81%1.56%
*Numbers in thousands, U.S. dollars

Practical Islamic Finance concludes:

Riba is used but not relied upon in Shift’s operations.

What is Shift Environmental, Social, and Governance (ESG) impact?

Environment

No notable environmental highlights. 

Social

Shift has an average Glassdoor rating of 3.6 out of 5.0 from over 237 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.

Governance

No notable governance highlights.

Practical Islamic Finance concludes:

Shift Technologies has a net positive ESG impact.

Comfort Rating

From Shift’s business, financials, and ESG reviews, Practical Islamic Finance rates Shift’s stock as: 

Comfortable to invest in from a Halal perspective.

Sources

Shift Technologies 2020 10K 

Shift Technologies Q2 2021 10Q 

Shift | Buy Used Cars Online | Home Delivery

Shift Technologies, Inc. (SFT) Stock Price, News, Quote 

Glassdoor