Is it possible for Uber to attain a market value of one trillion dollars in the future?

Potential Future Valuation of Uber: Achieving a Trillion Dollars?

Uber Technologies, the ride-hailing giant, reported impressive financial figures for 2024, setting the stage for its ambitious goal to join the exclusive trillion-dollar club of companies over the next five years.

In 2024, Uber generated a staggering $162.8 billion in gross bookings across its mobility, delivery, and freight businesses. The company's adjusted EBITDA for the year stood at $6.5 billion, while free cash flow and adjusted EBITDA reached $6.9 billion and $6.5 billion, respectively. Uber posted consistent GAAP profits in both 2023 and 2024.

To achieve its lofty goal, Uber recognises the need for significant growth in profits. This will require a strategic combination of autonomy, advertising, delivery expansion, and disciplined execution.

Autonomous vehicles could play a pivotal role in Uber's journey towards profitability. By significantly increasing take rates and unit margins, autonomous rides could expand mobility segment margins for Uber. The company is deepening partnerships with companies like Lucid Motors and Baidu for robotaxi services to further bolster its autonomous efforts.

Uber's advertising business also presents a hidden profit engine. With a $1.5 billion annual run rate in Q1 of 2025, the advertising vertical could contribute significantly to Uber's revenue. Expanding Uber's logistics reach beyond food delivery to grocery, retail, and convenience delivery could turn it into a broader commerce infrastructure play.

However, the path to a trillion-dollar valuation is not without challenges. To reach a $40 billion to $50 billion in annual net income, Uber needs to grow its profits by 7 times or more over the next decade. Operational discipline will be crucial as Uber scales and aims to become profitable.

The global taxi and ride-hailing industry is projected to reach $712 billion by 2033, while the food delivery market is forecast to exceed $2 trillion by 2030. Uber's addressable market is estimated to be trillions of dollars in the coming decade.

Investors who have conviction that Uber can achieve this vision may consider holding the stock for more than five years. It's worth noting that Uber's business today is more diversified than it was a decade ago, positioning it well for the future.

Uber must expand its autonomous rides and advertising verticals, deepen partnerships with companies like Lucid Motors and Baidu for robotaxi services, and advance its network effects in mobility and delivery to grow towards becoming a trillion-dollar company over the next five years. The journey is ambitious, but with the right strategies in place, Uber is well on its way.