Uber eyes profits in 2023 as pandemic pain eases

 

Uber shares rose nearly 8% in premarket trading after Chief Executive Dara Khosrowshahi said the company is now focused on achieving profitability on a GAAP basis this year.

Uber Technologies on Wednesday set its sights on turning a profit this year after 2022, as a surge in demand for airport and office rides helps the company recover from the pandemic.

Uber shares rose nearly 8% in premarket trading after Chief Executive Dara Khosrowshahi said the company is now focused on achieving profitability on a GAAP basis this year.

“The impact of the pandemic on our mobility business is now well and truly behind us,” Khosrowshahi said.

Uber forecast adjusted EBITDA, a profitability metric that excludes certain costs, for the first quarter between $660 million and $700 million, according to data from Refinitiv, well above the average analyst estimate of $593.06 million.

Shares of smaller rival Lyft also rose after Uber's upbeat forecast.

The rideshare market is benefiting from normalization and rising car ownership costs, which is driving many people to opt for cab rides. Plus, more drivers are signing up as they look for new sources of income.

Uber, which operates in more than 70 countries and 10,000 cities, said new rideshare products such as pre-booking, shared rides, car rental and car sharing were also driving revenue.

Khosrowshahi said active drivers on the platform reached an all-time high in the fourth quarter and continued to rise in January, leaving behind concerns of a lack of drivers signing up as demand surged.

Khosrowshahi said, “We have clearly differentiated ourselves from our competitors on driver preference. This has achieved meaningful category position globally, especially in the US, where our position is at an almost six-year high "

Analysts have raised concerns about Uber losing market share to smaller rival Lyft. Lyft is scheduled to report results on Thursday.

Uber's revenue rose 49% to $8.61 billion in the fourth quarter, beating estimates of $8.49 billion. Rideshare revenue increased by 82%.