- After years of massive losses, Uber is finally making money.
- The ride-hailing giant reported better-than-expected Q2 earnings on Tuesday.
After years of massive losses and huge spending, Uber is now making a habit of turning a profit.
The ride-hailing giant reported better-than-expected second-quarter earnings on Tuesday, with revenue rising 16% versus the year before, sending its stock price up nearly 6% before the bell.
This comes after Uber announced its first-ever annual operating profit of $1.1 billion for 2023 in February.
Here's why the company is on the up:
1. Ridesharing boom
Uber's core business is booming right now, with gross bookings in its rideshare division jumping 23% year-over-year, according to its latest earnings release.
The company said that growth was driven by better-than-expected performance in Latin America and the Asia Pacific region, where Uber has expanded in recent years.
The ride-hailing giant recently announced a collaboration with Tesla rival BYD that will allow drivers to lease 100,000 electric vehicles.
2. Delivery bet pays off
Uber's food and grocery delivery services have grown rapidly and become a core part of the company.
Like its ridesharing business, delivery saw healthy growth in the second quarter, with gross bookings rising 16% to $18.1 billion from last year.
The company's partnership with Doordash rival Instacart also seems to be paying off. In comments accompanying earnings, Uber CEO Dara Khosrowshahi said that orders through the Instacart app were, on average, 20% larger than native Uber Eats orders.
3. Advertising boom
Uber's advertising business is also booming. The company said Tuesday that Uber Ads achieved a net revenue annual run rate of $1 billion.
Another area likely giving shareholders something to cheer about is the Uber One membership program, which offers subscribers money off rides, zero delivery fees, and other exclusive perks.
Khosrowshahi told investors in Uber Q1 earnings earlier this year the company expects Uber One, which launched in 2021, to generate more than $1 billion in revenue this year.
4. New Transport Modes
Uber has also added new transport options in the past few years, including motorcycle taxis, scooters, and airport shuttles.
The company has also increased its focus on shared rides, expanding its UberX Share service to a host of new US cities last year.
5. Cutting costs
After the high-spending reign of CEO and cofounder Travis Kalanick, Uber has cut back costs significantly in recent years, helping it to achieve profitability.
New CEO Khosrowshahi abandoned Uber's long-held China ambitions when he offloaded the company's stake in Chinese ride-hailing giant Didi Chuxing in 2021, and cut spending internally by laying off parts of Uber's workforce during and after the pandemic.
Uber did not respond to a request for comment from Business Insider, made outside normal working hours.