Uber Investors Ought to Look at the Big Picture

Uber shareholders kicked the ride-hailing giant in the shins today for what some may have considered lackluster revenue growth. They ought to be celebrating! Finally, at long last, Uber’s operations are profitable.

The company this morning said it generated $9.23 billion in revenue in the second quarter, a little more than $100 million less than what analysts were expecting, according to S&P Global Market Intelligence. That drove the stock down nearly 6% for the day, threatening to overshadow a major milestone: an operating profit of $326 million, its first ever. 

It has long been an open question whether consumer businesses such as Uber would ever reach profitability. CEO Dara Khosrowshahi deserves credit for finally proving its doubters wrong. “Many observers over the years boldly proclaimed that we would never make any money. And I understood why they felt that way,” Khosrowshahi said in his opening remarks on today’s earnings call. “But we knew they were wrong about Uber.” 

To be sure, one way Uber has done that is by raising prices for customers from the bargains they once were. Earlier today Wired Magazine published an interview with Khosrowshahi from May, in which the author told the CEO his nearly three-mile Uber ride cost him more than $50. Khosrowshahi’s response: “Oh my God. Wow.”