Uber Technologies Inc. recently released its financial results for Q4 2024 and the full year, revealing a complex narrative surrounding the company's performance and strategy.

Following the announcement, Uber's shares dropped approximately 5% in after-hours trading.

The company's annual bookings grew by 18%, reaching $44 billion, comprised of $22.8 billion from ride-hailing services and $20.1 billion from food delivery services.

Uber reported revenues of $12 billion, marking a 20% increase compared to 2023, while operating income rose to $770 million, an 18% increase.

The net income for the year stood at $9.8 billion, of which about $7 billion is attributed to tax advantages and stock valuations.

In conjunction with its earnings report, Uber announced a stock buyback program, believing that the market was undervaluing the company, with shares priced at $70, resulting in a market capitalization of $147 billion.

Investor Bill Ackman disclosed that his investment fund began purchasing Uber shares in January and now owns 30 million shares, expressing confidence in Uber as one of the best-managed businesses globally, despite acknowledging its current undervaluation.

Following Ackman’s announcement, Uber’s stock surged by about 6.5% and has increased by approximately 25% year-to-date, in stark contrast to a 4% return for the Nasdaq index.

While these statistics suggest strong growth, the underlying reality is multifaceted.

Ackman appears to value management over economic fundamentals, as Uber's success is not attributable to significant technological breakthroughs or superior resource allocation.

Critics argue Uber excels at engineering a regulatory reality that allows it to circumvent laws and maximize revenue at the cost of both drivers and consumers.

To achieve profitability, Uber has not improved service quality or enhanced operational efficiency, but rather maximized profits from drivers and couriers, while minimizing costs unrelated to its core ride-sharing and food delivery operations.

The company has notably shifted its focus away from technology ambitions, exiting markets worldwide, closing its autonomous vehicles division, scaling back its trucking business, and significantly reducing research and development spending.

From a revenue perspective, Uber has leveraged its market dominance and control over driver and courier working conditions to increase its share of the market.

Since going public, the average fare for an Uber ride has increased consistently, rising 63% from 2019 until the second quarter of 2022. While prices saw a slight decline of about 8% from their peak through the end of 2024, they remain 52% higher than in 2019, even as driver earnings have not improved.

Instead, since reaching a pricing cap in Q2 2022, Uber has increased its commission rate from drivers, which climbed from 20.7% in Q4 2019 to 27.1% by the end of 2024, significantly contributing to its profitability.

The ongoing question has been how Uber can impose fee increases in a market where consumers exhibit indifference to brands (Uber versus Lyft), and where drivers do not consider themselves employees, complicating loyalty.

The often-cited explanation attributes Uber's increased fees to its operational excellence.

However, this interpretation overlooks two primary aspects: political maneuvering and algorithmic manipulation allowing the transfer of wealth from drivers to corporate profits.

In 2022, Uber transitioned to a "prepayment" model wherein the company sets a fixed price for drivers.

This system has created working conditions resulting in penalties for drivers who do not accept sufficient rides in a region.

Studies suggest this policy pressures drivers to take rides quickly, often while engaged in existing commitments, creating both a façade of high availability for customers and diminishing the average earnings potential for drivers and couriers.

Research has consistently shown that drivers who have operational independence and choose rides strategically manage to increase their earnings.

However, to assert algorithmic control over drivers effectively, Uber worked to create the perception that it lacks substantial market power able to enact such measures.

This required leveraging economic strength into political influence.

Uber's lobbying efforts have reached hundreds of millions, and despite a California Supreme Court ruling classifying its drivers as employees, the company has managed to maintain its business model by promoting itself as a "technology platform" rather than a "transportation company."

In late 2020, Uber successfully passed legislation in a ballot measure, despite opposition from its drivers, which solidified its standing and excluded drivers from social protections and the right to unionize.

Following this legislative victory, Uber’s stock surged nearly 50%, reaching approximately $53 per share, as investors recognized that Uber had preserved its main business advantage: the capacity to transfer capital from workers to the company.

This reflects a broader market sentiment that rewards businesses for establishing market power that suppresses employee compensation and circumvents regulatory constraints.

Uber's approach is not isolated; similar dynamics can be observed in the Israeli market with companies such as Wolt, which employs comparable strategies to attract revenue while underpaying workers and increasing consumer pricing.

The ongoing discourse around price increases largely revolves around economic value—whether the costs to consumers are justified—while often sidelining critical discussions regarding how these profits are actually generated.

Both Uber and Wolt illustrate a market environment where dominant companies thrive, not necessarily through innovation or competitive fairness, but by navigating expansive capital control and evading significant regulatory oversight, raising questions about the future of corporate responsibility in the evolving economy.