You’re probably noticing it – often Uber isn’t cheaper than a taxi anymore. The great wealth redistribution – Uber taking money from wealthy venture capitalists and sharing it with us all through subsidised, unprofitable transport – is over. The pressure is on for Uber to turn a profit. And we’ll be the ones paying for it.
In the five years since Uber became public, the company has lost $30 billion. And the company’s refrain, that they will reach profitability once they reach scale, is starting to sound hollow. The ridesharing company operates in 72 countries and has more than 118 million monthly active users. At this point it is beyond belief that profitability lies just beyond the next leg of growth.
So Uber is raising prices. According to one analysis, the average price of an Uber rose 92% between 2018 and 2021. According to another, the average price rise 45% between 2019 and 2022.
Profitability is the name of the game for tech stocks in 2022. The market, once incredibly patient with unprofitable companies investing for growth, has taken a sharp, inpatient turn. Uber’s share price has been cut in half over the past 12 months, down 54%. If they can’t generate a profit in coming quarters, this may just be the start.
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