Uber marks milestone with inaugural yearly profit announcement.

After heavy investment, US taxi app firm flips $1.8bn loss to $1.1bn profit.

In a significant milestone, Uber records inaugural yearly profit as a corporation, following extensive investment in global expansion.

The American ride-hailing app company reported earnings of $1.1 billion ($870 million) in 2023, contrasting with a $1.8 billion loss the previous year.

The achievement has spurred investor speculation regarding potential share repurchases or dividend distributions by Uber. Prashanth Mahendra-Rajah, Uber’s CFO, stated that the company would disclose its “capital allocation plans” to investors in the upcoming week.

Following an initial decline, Uber’s stock climbed 1% on Wednesday. Throughout 2024, its shares have surged by over 20%, doubling in value over the past year, now valuing the company at nearly $150 billion.

During the final quarter of 2023, customers reserved 2.6 billion trips, equating to approximately 28 million bookings daily. Uber’s CEO, Dara Khosrowshahi, remarked, “2023 marked a turning point for Uber, demonstrating our ability to sustain robust, profitable expansion on a grand scale. Our user base is broader and more involved than before, with our platform facilitating an average of nearly 26 million daily rides last year.”

Founded in 2009 by entrepreneurs Garrett Camp and Travis Kalanick, Uber saw Kalanick assume the role of CEO in 2010. Under his leadership, Uber underwent a rapid expansion, first across the US, then into Europe and numerous cities globally. This expansion was facilitated by Uber’s adoption of the gig economy model, classifying its drivers in many regions as self-employed individuals ineligible for benefits like sick leave or paid vacation.

During Kalanick’s tenure as CEO, the company faced numerous scandals and conflicts with regulators. In 2022, a Guardian leak revealed Uber’s violations of laws, deceptive interactions with law enforcement, and covert lobbying efforts as it expanded its services.

Kalanick stepped down in 2017, succeeded by Khosrowshahi, a former CEO of Expedia. Khosrowshahi has aimed to improve the company’s public image and prioritize compliance with regulatory standards.

According to Dan Ives, an analyst at Wedbush, Khosrowshahi has orchestrated “one of the most remarkable turnarounds in the tech industry,” indicating that Uber’s momentum shows no signs of waning.

Despite consistent substantial operating losses following its initial public offering in May 2019, Uber saw losses escalate from $3 billion in 2018 to $8.6 billion in 2019, then decrease to $4.9 billion in 2020, $3.8 billion in 2021, and finally $1.8 billion in 2022.

The company’s profitability in 2023 was partly attributed to increasing demand. Gross bookings, representing the total payments made by Uber passengers and delivery customers, surged by 22% to $37.6 billion in the last quarter of 2023 compared to the previous year. Uber’s portion of these transactions amounted to $9.9 billion.