Uber’s first operating profit turns the corner

Uber Technologies reported its first annual operating profit in history. The demand for its ride-sharing business, advertising, and food delivery was a major factor.

The company’s operations generated $1.1 billion of income in 2023. This reversed a $1.8 billion loss in 2022. Revenues of $37.3 billion were up 17 percent from $31.9 billion a year earlier.

This is a major turnaround for Uber, who warned that the company would not make money when they announced their 2019 float. Uber, despite its huge brand recognition, has suffered heavy losses over the years. It only announced a quarterly profit in August of last year.

Dara Khorowshahi said Uber’s CEO, Dara Khosrowshahi that 2023 was “an inflection for Uber. It proved to us that we could continue to generate profitable growth on a large scale.” Our audience is larger and more engaged, and our platform powered an average of almost 26 million daily trips in the past year.

Uber’s mobility division, which matches customers with drivers, reported bookings of $19.3 billion for the fourth quarter, an increase of 29 percent on the previous year. Latin America had “standout growth”, Asia Pacific also showed strong growth, and India was described as “gaining category positioning”.

Bookings in the delivery sector (such as groceries and take-out) increased by 19% year-on-year, to $17 billion. Freight, the shipping division, followed a trend that was already in place and fell by 17 percent on a quarterly basis due to a “challenging market”. Both the amount of money the company earned per load as well as the volume shipped decreased.

It has continued to push its advertising platform, increasing the number of businesses marketing on it by 75 percent in the fourth quarter. This brings the total number of companies using the platform up to 550,000. Khosrowshahi said that “the strongest area is the smaller businesses who advertise on the platform such as the local restaurant”.

Uber, formerly known as Ubercab Inc. was founded by Travis Kalanick in 2009. Today it has approximately 32,000 employees in 70 different countries. Kalanick was fired in 2017 following a series of sexual harassment and privacy scandals. The company was threatened with bans, including in London, and has been subject to repeated legal challenges regarding its employment obligations towards its drivers.

Its business was almost brought to a standstill by the pandemic, which halted all travel. The shortage of drivers and the stiff competition that followed were the next two things to happen. The driver shortage has stabilised with a 30% increase in drivers in the fourth quarter of last year compared to the previous year.

Khosrowshahi is a former Expedia boss who has expanded his company’s offerings to include a variety of transport options. This includes trains in certain markets such as Britain. He made it clear that his company will be a major player in the travel industry, and tour operators as well, by using data collected from its users.

Uber predicted that in the first quarter 2024 it would have between $37 billion to $38.5 billion worth of bookings, and an estimated adjusted profit before interest, taxes and other charges between $1.26 and $1.34 trillion. Next week, the company is expected announce a stock buyback.

Uber shares rose by 18 cents or 0.3 percent to $70.65 last night at New York’s close.