• Monday, July 15, 2024
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BusinessDay

Uber grows revenue to $8.6bn on new business models

Moove moves to subsidise fuel costs for drivers

Uber, one of the ride-hailing businesses, said its revenue increased to $ 8.6 billion in the last three months of 2022, representing growth of 49 percent as a result of the introduction of new business models and new acquisitions.

“Revenue growth significantly outpaced gross bookings growth due to a change in the business model for the UK Mobility business and the acquisition of Transplace by Uber Freight,” the company said.

On a constant currency basis, mobility gross bookings increased to $14.9 billion in the fourth quarter of 2022 showing a 37 percent rise from $ 11.34 billion in the same period in 2021, while on an annual basis, it recorded a 33 percent increase of $115.4 billion from $90.4 billion in 2021.

Mobility Revenue also grew to $4.1 billion in the fourth quarter of 2022, representing 82 percent growth from $2.2 billion in the same quarter of the previous year, while on an annual basis, it increased to $8.6 billion in 2022, from $5.8 billion in 2021.

“We ended 2022 with our strongest quarter ever, with robust demand and record margins. Our global scale and unique platform advantages position us well to accelerate this momentum into 2023,” said Dara Khosrowshahi, CEO of Uber.

Within the period under review, Uber reached 131 million consumers, an 11 percent increase, and carried out 2.1 billion trips, up from 1.7 billion trips from the year before, or approximately 23 million trips per day on average.

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The company also said it launched a single cross-platform membership programme called Uber One in five countries last year, including Chile, France, Japan, Spain, and Taiwan, making the programme available in a total of 12 countries.

By geographical regions, it recorded the highest revenue in Europe, the Middle East, and Africa with an increase of $2.1 billion in 2022, a 110 percent increase, from $995 million recorded in 2021.

For the last quarter of 2022, net cash used in operating activities was $244 million, and free cash flow, defined as net cash flows from operating activities and fewer capital expenditures, was at a negative of $303 million.

Through 2022, net cash provided by operating activities was $642 million, and free cash flow was $390 million.

Uber attributed the $390 million in free cash flow to the previously revealed HM Revenue & Customs (HMRC) VAT claims settlement in the UK. “Excluding this settlement, free cash flow would have been $430 million and $1.1 billion in the fourth quarter of 2022 and full year 2022, respectively,” it added.

Unrestricted cash, cash equivalents, and short-term investments were $4.3 billion at the end of the fourth quarter.

Uber reported $595 million in profit thanks to its stakes in other ride-hailing companies. The company said it expected to achieve operating income profitability at some point this year, which would be a sign of growing strength in its business.

The company further said that it expects the platform to continue to grow in 2023 and Khosrowshahi said at the World Economic Forum last month that he does not anticipate any company wide layoffs, according to Reuter’s reports.

“In 2022, we significantly exceeded our profitability outlook, with an incremental margin of 10 percent. Our outlook for Gross Bookings and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) step up in the first quarter of 2023 builds on that progress, and sets us up for yet another record year,” said Nelson Chai, the chief financial officer of Uber.

With an expected 3 percent currency headwind, the company’s outlook for quarter one of 2023 expects gross bookings to grow between 20 and 24 percent on an annual basis in constant currency, translating to a range of $31.0 billion to $32.0 billion and adjusted earnings before interest and taxes (EBITDA) of $660 million to $700 million.