After years of investor spending, US taxi app turns $1.8bn loss into $1.1bn profit.
Uber, now a limited company, marks its first annual operating profit, a milestone after aggressive global expansion fueled by billions from investors. The US taxi app reported $1.1bn profit in 2023, contrasting with a $1.8bn loss in the previous year.
Investors are now speculating whether Uber will repurchase shares or distribute dividends. Prashanth Mahendra-Rajah, Uber’s CFO, announced plans to share “capital allocation plans” with investors next week. Despite an initial dip, Uber’s share price increased by 1% on Wednesday. With a rise of more than a fifth in 2024 and doubling in the last year, the company’s valuation now stands at nearly $150 billion.
During the final quarter of 2023, customers booked 2.6 billion trips, averaging approximately 28 million trips per day. Dara Khosrowshahi, Uber’s CEO, remarked, “2023 marked a turning point for Uber, demonstrating our ability to sustain robust, profitable growth on a large scale. Our user base is now larger and more active than ever, with our platform facilitating an average of nearly 26 million daily trips last year.”
Founded in 2009 by entrepreneurs Garrett Camp and Travis Kalanick, Uber saw Kalanick assume the role of chief executive in 2010. Under his leadership, the company embarked on a rapid expansion, with the app quickly gaining traction across the US, Europe, and numerous cities worldwide.
Uber’s expansion was facilitated by its adoption of the gig economy model, where drivers in numerous countries were classified as self-employed, lacking entitlements like sick pay or paid vacation.
During Kalanick’s tenure as CEO, the company faced a string of scandals and regulatory conflicts. In 2022, a leak disclosed by The Guardian revealed Uber’s disregard for laws, manipulation of law enforcement, and clandestine lobbying of governments during its service expansion.
According to Dan Ives, an analyst at Wedbush investment bank, Khosrowshahi has orchestrated “one of the most remarkable turnarounds in the tech industry,” asserting that Uber’s momentum shows no signs of waning.
Since its IPO on the New York Stock Exchange in May 2019, Uber had consistently incurred substantial operating losses. Losses surged from $3 billion in 2018 to $8.6 billion in 2019, before gradually decreasing to $4.9 billion in 2020, $3.8 billion in 2021, and ultimately $1.8 billion in 2022.
In 2023, Uber achieved profitability, partly due to increased demand. Gross bookings, representing the total payments made by Uber passengers and delivery customers, soared by 22% to $37.6 billion in the final quarter of 2023 compared to the previous year. Uber’s revenue from these transactions amounted to $9.9 billion.
