Have Uber, Lyft finally found a way to make ride-sharing profitable?

Longtime money-losing ride-share companies Uber Technologies and Lyft have surprised naysayers by doing what many thought was impossible: racing toward steady profits.

- Preetika Rana

2023 marked Uber's first year of being profitable as a public company. Uber put more gas in its tank Wednesday after it outlined better long-term financial goals during its investor day. Its stock jumped 15%.

"Many people question whether Uber could ever make money," Uber Chief Executive Dara Khosrowshahi said at Wednesday's event as he took a victory lap and bragged about the company's future.

On Tuesday, its smaller rival, Lyft, projected it would become cash-flow positive for the first time this year. That means it will generate more cash than it spends this year.

While that isn't a profit, investors see it as an important signal as Uber swerved to profitability a year after reaching that turning point.

"It is a huge milestone for us," said Lyft Chief Executive David Risher, who was hired last year to help turn the company around.

Lyft's stock surged 35% Wednesday. The stock rose on the back of the rosy outlook despite initial confusion from an embarrassing earnings typo that added an extra zero to a key number.

For over a decade, Uber and Lyft burned through billions of dollars in an attempt to grab market share. Now, their focus is on profitable growth and cost discipline.

"We are in a new era where the viability of the model is no longer in question," said Youssef Squali, a Truist Securities analyst covering both companies.