Uber reported its quarterly results Wednesday and, generally speaking, things go well for the ride-share company.
Uber’s revenue rose 49% in the last three months of 2022 to $8.6 billion.
Its drivers racked up 2 billion trips for the first time, an increase from 1.7 billion a year before.
The number of people using the service jumped 11% to 131 million.
But is Uber making money? The answer to that is yes. But not from its billions of rides.
The company reported $595 million in quarterly profit, but that’s apparently due entirely to Uber’s investments in other businesses.
Uber doesn’t expect its own operations to be making money until later this year.
CEO Dara Khosrowshahi spun the results as an unqualified success.
“We ended 2022 with our strongest quarter ever, with robust demand and record margins,” he said in a statement.
“In 2022, we significantly exceeded our profitability outlook,” he said, although the emphasis there should be more on “outlook” than “profitability.”
Uber’s chief financial officer, Nelson Chai, said the company now anticipates “another record year” for 2023, although, again, record revenue and ridership don’t necessarily mean profit.
That’s not to say Uber and its cousin Lyft aren’t running strong businesses. Clearly they are in light of growing demand for their services.
The trick is running a sustainable operation that brings in more cash than it burns through.
In that sense, the ride-share companies face the same dilemma as streaming services — how do you achieve long-term profitability without raising prices to a point where customers say thanks but no thanks?
As a consumer, I find Uber and Lyft a great alternative to traditional taxis.
But that could change if prices rise to the point where the service no longer represents good value for money.
We’ll see how Uber’s “profitability outlook” develops in coming months.