General
February 7, 2024
3 minutes read

Ride-Hailing Giant Uber Reports First Annual Profit

Uber (NYSE: UBER), the San Francisco-based ride-hailing giant, has reported its first full year of operating profits as a public…

Uber (NYSE: UBER), the San Francisco-based ride-hailing giant, has reported its first full year of operating profits as a public company. The company released its 2023 financial report on Wednesday, showing a $1.1bn operating profit.

Net income for the year ended December 31, 2023, was $1.9bn, compared to a $9.1bn loss in 2022.

Operating profit represents the gain from Uber’s actual business, primarily ride-hailing and food delivery.

Net income includes investment gains from Uber’s stakes in various competitors, including China’s Didi and Singapore’s Grab. Uber amassed these stakes by selling some international divisions to rivals as it sought to streamline its business and focus on core markets. The company also sold its air taxi and autonomous driving divisions to rivals in which it now holds sizeable equity stakes.

A full year of operating profits is a big deal for Uber, which has racked up nearly $30bn in operating losses since its inception. Uber spent heavily to win and maintain market share as it expanded to competitive regions. Lately, the company has scaled back its expansion to focus on building a stable, profitable business in its dominant regions, primarily the United States.

Uber’s 2023 earnings were helped by strong consumer demand for ride-hailing and food deliveries, plus a growing high-margin advertising business. “2023 was an inflection point for Uber, proving that we can continue to generate strong, profitable growth at scale,” chief executive Dara Khosrowshahi said in a statement.

With high interest rates increasing the cost of capital, investors have largely soured on tech companies burning through billions of dollars to gain market share. Publicly-listed companies have become more focused on streamlining operations and building stable, profitable businesses, or at least reporting as little losses as possible.

After years of abundant spending, Uber began reining in costs in 2019, shortly before the Covid pandemic struck and sunk the company’s ride-hailing business (it has gradually recovered). Uber’s food delivery business gave it a lifeline during the pandemic, while the company downsized and shed non-core businesses like self-driving and air taxis to cut costs.