Uber records first annual profit

Uber, the ride-hailing and delivery giant, has finally reached a significant milestone: its first annual operating profit. This achievement marks a pivotal moment in the company’s often turbulent history, sending its shares soaring and signifying a major turning point.

For years, Uber faced challenges and skepticism. Its initial public offering (IPO) in 2019 fell short of expectations, followed by consistent losses and doubts about its long-term viability. It battled fierce competition from rivals like Lyft and DoorDash, struggled with regulators globally, and grappled with ethical controversies under its former leadership.

However, the pandemic proved to be a turning point. As the world gradually emerged from lockdowns, Uber seized the opportunity. With competitors faltering, Uber streamlined operations, cut costs, and focused on profitability.

Strong Performance and Future Plans

This year, Uber delivered impressive results. Operating profit reached $1.1 billion, exceeding expectations, and net profit soared to $1.9 billion compared to a whopping $9.1 billion loss in 2022.

User base reached a record 150 million, with quarterly gross bookings jumping 22%. Uber’s success extends beyond ride-hailing, with its delivery business, including grocery and retail, contributing significantly to growth.

Dara Khosrowshahi, chief executive, celebrated the results as “an inflection point for Uber, proving that we can continue to generate strong profitable growth at scale”.

Uber’s shares rose about 1 percent by midday trading in New York. The stock has enjoyed a meteoric rise in the past 12 months, more than doubling and sending the company’s market value to almost $150 billion, according to Financial Times.

Looking Ahead

This success translates into tangible rewards for investors. Uber plans to announce a share buyback program next week, potentially followed by its first-ever dividend announcement. This shift from cash burn to investor returns underscores the company’s confidence in its sustainable profitability.

Uber has a leading presence in Nigeria. It has however faced increasing competition from Bolt, Drive-In and other ride-hailing companies.