Uber has warned it may not remain profitable in the UK because of rising costs despite its revenue surging by more than £1bn during its latest financial year.
The US giant has said it will need to generate and sustain increased revenue levels while lowering proportionate expenses in the coming years “to achieve profitability in many of our largest markets”.
Uber added that even if it did so, “we may not be able to maintain or increase profitability”.
The warning, highlighted in bold, was included in the firm’s latest financial accounts for 2024 which show its revenue jumped from £5.2bn to £6.5bn.
However the results, filed with Companies House, also confirm that Uber’s pre-tax profit in the UK declined from £29.3m to £21.6m over the same period.
Uber said its turnover had increased by 24 per cent mainly because of a rise in the number of taxi trips and orders through Uber Eats.
The amount the business received in revenue from its mobility division rose in the year from £4.1bn to £5.1bn while Uber Eats’ sales also grew from £1.1bn to £1.3bn.
At the same time, the group’s cost of sales jumped from £4.1bn to £5.1bn.
During the year, the average number of people employed by Uber in the UK increased from 427 to 512.
On why its pre-tax profit fell by 26 per cent, the company added that this was primarily because of an increase in administrative expenses in her Delivery UK.
Uber rivals handed major VAT boost
The results come after City AM reported in July that Uber’s rival taxi operators will not have to pay 20 per cent VAT on their profits outside London following a landmark Supreme Court ruling.
The court decided that private-hire operators do not enter into a contract with passengers and therefore are except from the tax.
The ruling came after Uber brought the case following a Supreme Court decision in 2021 which ruled that its drivers were workers. That decision impacted Uber’s tax and other obligations in the UK.
The High Court in London ruled in its favour in 2023 after Uber sought a declaration that private-hire taxi operators enter into a contract with passengers.
However, the decision, which meant that operators would have to pay VAT at 20 per cent, was reversed by the Court of Appeal in July 2024 after being challenged by private hire operators Delta Taxis and the platform Veezu. Uber then appealed to the Supreme Court.
In a separate case earlier this year, Estonian ride-hailing and food delivery startup Bolt defeated an appeal by the UK tax authority HMRC on what it has pay VAT on at 20 per cent.
Since then, HMRC has been granted permission to challenge the ruling.