Uber reached a long-awaited milestone yesterday after posting its first-ever operating profit of $326 million. The ride-hailing giant, which has burned through $31.5 billion in operating losses since it started reporting finances in 2014, saw what should have been a celebratory report marred — revenue missed analysts' estimates by $100 million, causing shares to plummet 7%, the steepest decline since October.
Fueled by cash
Founded in 2009, Uber's financial path has been tumultuous from the start, relying on generous venture capital funding during times of rock-bottom interest rates. Its founding principle was built on the belief that, if the company amassed a vast enough customer base and dominated the market by any means necessary, eventually profitability would be within reach. This high-octane strategy led to a dramatic and precarious period for the company, which saw losses mount, key figures resign, and even inspired a TV show in the process.
After 8 years, however, the need for a more steady and focused approach became evident, prompting Dara Khosrowshahi to take the wheel as the new CEO in 2017. Under Khosrowshahi’s leadership, Uber set its sights on cost control, implementing measures like cutting headcount during the pandemic and selling its self-driving unit for a substantial $4 billion. The company also prioritized efficiency in its delivery operations while adopting a more disciplined approach to customer discounts and driver incentives — a range of strategies that have enabled Uber to finally make its operations profitable.