Uber revolutionized the start of the taxi service and made our lives so much easier.
With over 93 million customers using Uber today, it is one of the most well-known companies in the U.S. and around the world. This might make you wonder is Uber profitable?
Uber’s business model is quite simple and can be understood by the common lot, but to understand its revenue and profit, you would have to dig a bit deeper.
Uber Technologies Inc., or UBER, has emerged as one of the most fascinating companies over the past decade and is credited for kickstarting the evolution of the taxi market.
Ordering a taxi was a nightmare in California, where Uber was founded, and so co-founder Garrett Camp came up with the idea of establishing his own fleet of cabs to pick him up from clubs and bars.
Soon enough, he realized the value of this idea which saved him so much time and effort of waiting for a taxi on the sidewalk. And so Uber was founded in 2009 and, shortly afterward, was joined by Travis Kalanick.
During Kalanick’s tenure as CEO, Uber became widely known and took the US by storm.
During that time, the company also expanded in Asia, South America, Europe, etc., as a plan of its growth strategy.
So Uber not only runs taxis but also owns well-known subsidiaries, including:
Uber Eats is a food delivery company that initially started in Los Angeles, Chicago, and New York and later expanded to nine more countries.
UberWav is a service that offers wheelchair accessibility and is available in cities like New York, London, and Chicago.
Uber Freight is a service that offers transportation and a logistic network to help shippers and truckers take control of their freight and make deliveries.
|Launch date||May 2010|
|HQ||San Francisco, California|
|Business type||Public (NYSE: UBER)|
|People||Travis Kalanick (co-founder), Dara Khosrowshahi (CEO), Garrett Camp (co-founder)|
Companies Acquired By Uber
Since its founding in 2009, Uber has acquired a couple of businesses, including:
Uber acquired Careem in 2021 for $3 billion. Careem is located in the Middle East and is a transportation network company operating in 90 cities across 14 countries.
Again in 2021, Uber acquired Transplace for $2 billion, which is a trucking logistics company. Transplace comes under freight, which is another subsidiary of Uber.
Uber acquired Jump Bikes in 2018, and it is the largest e-sharing bike company. Uber Bikes was founded in 2010 but is now a part of Uber.
Drizly was founded in 2013, and Uber acquired it in 2021. Drizzly is an alcohol delivery e-commerce company based in Boston that delivers alcohol and other items right at the doorstep of customers.
Postmates is a well-known grocery and food delivery service. But Uber Technologies acquired it in 2021 and merged it with Uber Eats.
Uber acquired DeCarta in 2015, which is a mapping and location technology company.
This acquisition allowed Uber to develop its mapping technology for their Uber drivers by getting access to DeCarta’s proprietary map data.
Acquired in 2016, Otto is a self-driving technology that is made for commercial trucks.
Limo Anywhere was purchased in 2015 by Uber for $200 million and is an on-demand limousine service that is now known as Uber Lux.
Is Uber Profitable For Drivers?
Before finding out if Uber is profitable for drivers, let us first understand how Uber operates.
Uber is a platform that connects the customer with the driver, be it for Uber rides or Uber Eats.
So as you may already know, a customer can book a ride and pay Uber for the same. Uber keeps a part of this fee and pays the other part to the driver.’
So in 2022, Uber Mobility took 27% of each booking made on the platform, Whereas Uber Eats took 20% of each order made on their platform. The rates might vary slightly depending on the demand and supply.
Now the main question is how much do Uber Drivers make?
On average, Uber drivers make $15 -$22 per hour, but the pay could vary depending on the demand, city, tips, base fare, incentives, etc.
This means that a Uber driver makes between $38,002 – $55,000 per year on average. Looking at this figure, we can conclude that Uber is profitable for drivers, especially if the driver is working in a big city with more demand and price.
Is Uber Profitable?
Is Uber Profitable? The short answer is no, Uber is not profitable, but the longer answer is more complicated.
You should note that according to Statista, Uber made a net revenue of $31.88 billion in 2022, showing an 82% increase year-on-year. However, it made a net loss of 9.1 billion U.S. dollars during this time.
Has Uber Ever Made a Profit?
Over the year, Uber has shown tremendous growth thanks to its business acquisitions, but over the years, Uber has never made a profit.
However, the revenue of Uber has increased so much that it made a revenue of $3.8 billion in 2016 and reached a revenue of $31.8 billion in 2022.
The company is yet to make a profit, but the growing revenue and growth of Uber indicate that the company might be generating profits soon.
Uber Profits By Year
As you can see, Uber has been a loss-making company that has been consistently making losses over the years.
Uber Revenue By Year
Uber Annual Revenue By Segment
Canada & U.S. is responsible for the major portion of revenue for Uber, with contribution of $31.8 billion and $19.4 billion in 2022 from these countries.
|Year||US & Canada||LATAM||EMEA||APAC|
Why Is Uber Not Profitable?
Uber has been making continuous losses despite being one the biggest player in the market, and this begs the question, why is Uber not profitable?
Here are the three biggest reasons why Uber is not a profitable company:
Investments & Aquisitions
Since it was founded, Uber has acquired several companies for millions of dollars. Here are the company’s biggest acquisitions to date:
- Careem for $3.1 billion in March 2019
- Otto for $680 million in August 2016
- Transplace for $2.25 billion in July 2021
- Postmates for $2.7 billion in July 2020
- Drizly for $1.1 billion in February 2021
Apart from this, Uber also invests in companies. For example, it invested $170 million in Lime, which is a scooter startup.
In addition, sellings have also affected its profit earnings. For example, Uber sold its Advanced Technologies Group to Aurora in 2020 and sold its China business to Didi in Exchange, to name a few.
The pandemic gave a major blow to Uber and many other businesses alike. During that time, Uber’s ride demand went down by 70%, causing the company to bear a loss of $2.936 billion.
During the pandemic, Uber also committed $50 million to various Covid aids and even spent $10 million to give free rides to healthcare workers, and so on.
One of the biggest reasons why Uber keeps incurring losses is because of competitors.
Uber currently operates in 70 countries and 10,000+ cities across the world and faces competition from local taxi companies, local transport, and some other brands.
For example, Cabify is a tough competitor of Uber in Spanish countries, and so is inDriver, which charges lower fees than Uber.
Uber also had to exit from a couple of markets in recent years due to unprofitability, such as the Czech Republic, Ukraine, Saudi Arabia, Romania, Egypt, etc.
More Reasons Why Uber is Loosing Money:
Will Uber Ever Be Profitable?
Uber is bordering on breaking even, and the company is expecting to post a final loss in 2023 before making anticipated profits of $1.4 billion in 2024. So the company should be profitable in the next year.
In order to achieve this goal, Uber has to achieve an annual growth rate of 83%, which is extremely buoyant.
If this rate turns too aggressive, then the company might be able to make profits much later.
Uber Annual Users
Uber’s annual users saw a dip during the Pandemic; however, now the company is seeing an increase in users again.
Lyft Vs. Uber Market Share For Food Delivery
As you can see from the graph below, the market share of Uber went down in the intial years, but now it has starting rising back up as compare to Lyft.
It is quite clear that Uber is not a profitable company, and despite its measures to reduce its spending and increase costs, the company is yet to find its way toward profitability.
The growth in Uber’s revenue figure, market share, and growing number of users tells that the company is on the right track and might be seeing profits soon. If you are looking for a profitable franchise then Uber Franchise is your go-to option.
We hope you found your answer on uber profitable in this article and found it useful.
What companies were owned by Uber previously?
Here’s a list of companies Uber owned or acquired previously:
- Raiser LLC
- Xchange Technologies
- Xchange Leasing
- Uber Health
- Uber Copter
What is the future of Uber?
Uber recently announced that they plan to become a fully electronic, zero-emission platform by 2040.
What is the success rate of Uber today?
Today, Uber is used by 3.5 million drivers and 93 million customers. Additionally, from its ride-sharing business, Uber processed $26.61 billion in gross bookings.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.