Michelle ThompsonUS cab app startup turns $1.8 billion deficit into $1.1 billion profit after years of spending billions of dollars from investors to expand.
Uber has announced its first annual operational profit as a limited company, marking a watershed moment for a corporation that has spent billions of dollars in investor funds on a rapid and often contentious global growth.
The US cab app business reported a profit of $1.1 billion (£870 million) in 2023, compared to a loss of $1.8 billion the previous year.
The milestone has sparked speculation among investors about whether Uber may buy back shares or pay out dividends to shareholders. Uber’s chief financial officer, Prashanth Mahendra-Rajah, announced that the company will share “capital allocation plans” with investors next week.
Uber’s stock price increased 1% on Wednesday after initially falling. Its stock is up more than a fifth through 2024 and has doubled in the previous year, valuing the firm at about $150 billion.
It stated that clients booked 2.6 billion trips in the final three months of 2023, or almost 28 million each day.
Uber’s CEO, Dara Khosrowshahi, stated, “2023 was an inflection point for Uber, demonstrating that we can continue to generate strong, profitable growth at scale.” Our viewers are broader and more engaged than ever, with our platform supporting nearly 26 million daily trips last year.”
The entrepreneurs Garrett Camp and Travis Kalanick started Uber in 2009. Kalanick became CEO in 2010 and oversaw an expansion that saw the app quickly spread across the United States, Europe, and many other cities around the world.
That rise was made feasible by Uber’s adoption of the gig economy, in which its drivers in many countries were regarded as self-employed and did not have entitlements such as sick pay or paid holiday.
Kalanick’s tenure as CEO was marked by a series of controversies and legal battles with regulators. In 2022, the Guardian reported on a leak that revealed Uber had breached the law, deceived authorities, and secretly influenced governments as it expanded its services.
Kalanick was succeeded in 2017 by Khosrowshahi, a former CEO of the travel agency Expedia, who has worked to soften the company’s image and focus more on meeting regulatory requirements.
According to Dan Ives, an analyst at the investment bank Wedbush, Khosrowshahi led “one of the best turnarounds ever in the tech world” and Uber was “not slowing down”.
Since its initial public offering on the New York Stock Exchange in May 2019, Uber has continuously reported significant operating losses. Losses increased from $3 billion in 2018 to $8.6 billion in 2019, before falling to $4.9 billion in 2020, $3.8 billion in 2021, and finally $1.8 billion in 2022.
It turned a profit in 2023, thanks in part to increased demand. Gross bookings, the total amount paid by Uber passengers and delivery customers, increased 22% to $37.6 billion in the fourth quarter of 2023 compared to the previous year. Uber’s portion from those deals was $9.9 billion.
