Uber reported annual operating profit for the first time as a limited liability company. It was a landmark moment for the company, which has spent billions of investors' money on an aggressive and often controversial expansion around the world.
The US taxi app company announced a profit of $1.1bn (£870m) in 2023, compared to a loss of $1.8bn the previous year.
The milestone has investors speculating about whether Uber will buy back stock or pay investors a dividend. Uber Chief Financial Officer Prashant Mahendra-Raja said the company will share its “capital allocation plan” with investors next week.
Uber stock rose 1% on Wednesday after initially falling. The company's stock has risen by more than a fifth through 2024 and doubled in the past 12 months, giving it a value of nearly $150 billion.
The company said customers have booked 2.6 billion trips in the past three months of 2023, which equates to about 28 million trips per day.
“2023 was a turning point for Uber, proving that we can continue to see strong, profitable growth at scale,” said Dara Khosrowshahi, Uber's chief executive officer. Our audience is bigger and more engaged than ever, and our platform powered an average of nearly 26 million trips every day last year.
Uber was founded in 2009 by entrepreneurs Garrett Camp and Travis Kalanick. Kalanick took over as CEO in 2010 and continued its expansion, during which time the app quickly spread across the United States, followed by Europe and many cities around the world.
This growth has been made possible by Uber's embrace of the gig economy, where drivers in many countries are considered self-employed and are not entitled to things like sick pay or paid time off.
Mr. Kalanick's time as CEO was marked by a series of scandals and battles with regulators. In 2022, leaks reported by the Guardian revealed how Uber broke laws, deceived police, and secretly lobbied governments while rolling out its service.
Mr. Kalanick was replaced in 2017 by Mr. Khosrowshahi, the former chief executive of travel agency Expedia, in an effort to soften the company's image and focus on meeting regulators' requirements.
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Dan Ives, an analyst at investment bank Wedbush, said Khosrowshahi has led “one of the greatest turnarounds in tech industry history” and that Uber is “not slowing down.”
Uber has consistently suffered significant operating losses since its stock listing on the New York Stock Exchange in May 2019. Losses increased from $3 billion in 2018 to $8.6 billion in 2019, then declined to $4.9 billion in 2020, $3.8 billion in 2021, and $1.8 billion in 2021. 2022.
Thanks in part to growing demand, the company made a profit in 2023. Gross booking value (the total amount paid by Uber riders and delivery customers) in the final quarter of 2023 increased 22% year over year to $37.6 billion. Uber's profit from these deals was $9.9 billion.
Source: www.theguardian.com
