Uber Is Having a Record Week, but Challenges Loom

Uber Technologies announced a $7 billion stock buyback this week, sending its stock price to an all time high on Wednesday and again on Thursday. The uptick came a week after Uber said 2023 marked its first profitable year since going public in 2019. The news wasn’t all good, however, as Uber drivers also walked off the job on Wednesday to protest low pay and poor working conditions.

Uber CFO Prashanth Mahendra-Rajah called the buyback of common stock proof of “the company’s strong financial momentum” while Thomas Hayes, chairman of Boston-based hedge fund Great Hill Capital, told Reuters the move represented “a vote of confidence in demand for their services as well as operational discipline perfectly executed by CEO Dara Khosrowshahi.” 

Still, Khosrowshahi, who took over the top role at the San Francisco-based ride-hail company in 2017, should be no stranger to speed bumps by now. In 2022, facing driver complaints and a drop in business he made headlines by getting behind the wheel and working undercover as an Uber driver himself. That exercise led to changes in the driver experience–although some say they don’t go far enough. The same day that Uber announced the buyback, drivers at Uber, Lyft, and DoorDash staged a one-day walkout to protest low wages and unsafe working conditions, leaving some businesses scrambling to cover Valentine’s Day deliveries.

“Pay has gotten significantly lower in recent years,” said Nupur Chowdhury, a Washington DC-area Uber driver and organizer, in an interview with the Washington Post. “That’s why people are super angry right now.”

The company’s UberEats service also drew fire recently for a planned Super Bowl ad that seemed to make light of food allergies.

Founded in 2009, Uber went from one of the pillars of the sharing economy to a rival to established taxi services, which put it in the crosshairs of regulators and established drivers who felt their rates were undercut. The company also came under fire for its toxic corporate culture and aggressive actions to try to put rivals out of business.

Now–thanks to a combination of inflation, the need to turn a profit, and pressure to pay drivers more–Uber and its rival Lyft have raised their prices to levels comparable with regular taxi services.