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It has 120 million customers, takes $10bn worth of bookings a month, and, it transpired this year, more or less had the French president on speed-dial, doing its bidding. But can Uber turn a profit?
The San Francisco-based ride-hailing giant squealed into “free cash flow”, as it puts it, in the last quarter, after racking up $23bn (£20bn) in losses in its first heady decade or so. On Tuesday, investors will see if it can repeat the trick in its third-quarter results.
Since its damp squib of a flotation in May 2019, Uber’s share price has been on the kind of hair-raising ride you might expect from a desperately inexperienced driver relying on a shaky satnav. It hit rock bottom, like pretty much all transport stocks, when Covid lockdowns first began in 2020. By 2021, it had trebled in value, when people realised they were going to need more pizzas delivered.
But the past year has seen a steady decline. For many, the simple act of going out and spending is a pre-Covid, pre-crisis habit – and with a scarcity of drivers, rocketing fuel costs and boring old stuff such as employment law weighing on Uber, the kind of loss-leading fares that attracted a generation of users can’t be sustained.
The only fillip for shareholders came this year around the time of the publication of the Uber Files – a global Guardian-led investigation into the firm’s nefarious practices in the past, from secret lobbying to duping police and exploiting protests. The share price surged in July by about 50%, as capitalists worldwide marvelled at quite how far Uber would once go to bend regulations and get the ear of the top dog in town.
Yes, they were the future once. But the days of executives pronouncing about being “fucking illegal” or that “violence guarantee[s] success” are past, while Emmanuel Macron is doubtless picking up the phone to text a little less now. Uber was famously a disruptor. Now, even that label feels so Liz Truss.
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Instead, Uber is trying to remodel as the centrist dad of the tech-meets-mobility world. Chief executive Dara Khosrowshahi came in vowing to be a better partner to cities, and has been pushed into being a better partner for Uber’s “partners” – the drivers, whom unions and some judges have said should be classed as employees and paid accordingly.
The company’s robotaxi dream has been parked, for now, with humans back in favour. In some American cities, Uber has even struck up unlikely alliances with the taxi industry of old – putting, for example, New York’s medallion-holding yellow-cab drivers on its app. In London, Uber’s licence was surprisingly renewed without drama this year, as it held out olive branches to the mayor and applauded green clean air and EV charging schemes.
Even the edgier stuff is played down – while Uber Eats Canada now offers to bring weed to users’ doors, the company says it is a move that could stymie the criminal market, and ensure less drug-driving.
Whatever the product, total revenues from deliveries work such as Uber Eats now pretty much match those of its rides, as people adapt to a life spent more at home. Freight is a growing patch for Uber, and it has recently launched a new advertising division to capture users at every stage, from booking on the app to the car ride itself. The ads will potentially generate $1bn annually from 2024, but also smack of slight desperation, as market doubts over big tech stocks engulf the company.
Uber is, of course, not the first global empire built on a dodgy past that leaders would like to airbrush. And it is still valued at $55bn, which is pretty good going for a cab firm. Quite where the modern regime heads, or turns a profit in a post-pandemic era, remains uncertain. But decline and fall still look some way off.
