Uber Technologies (UBER 1.05%) is a monster success story in the mobile age. The company, which was founded in 2009, has become a dominant platform that has a presence in more than 70 countries across the globe. Uber is so highly regarded that the company name is used interchangeably as a verb, a standing not many businesses achieve.

This transportation-as-a-service stock has been a huge winner. Just in the past three years, shares have rocketed 213% higher (as of Sept. 5). Besides this momentum, here’s one reason every investor should know about Uber.

Image source: Getty Images.

Uber’s most impressive trait

Uber benefits from a powerful network effect. This favorable setup supports its competitive position. Its mobility segment connects riders with drivers. As the number of riders increases, drivers find the platform much more valuable, as they can generate more income from a bigger customer base.

On the other hand, more riders will come on board as well because the experience will improve with greater driver supply. Riders might see better pricing and lower wait times.

The same situation applies to the delivery segment. Only this time, a larger number of restaurants is introduced on the supply side.

Only getting better

There are key indicators that reveal the strength of the network effect. For instance, Uber’s user base continues to grow at an impressive pace. The company had 180 million monthly active platform consumers (MAPCs) (as of June 30), up 15% year over year. What’s more, the average number of trips per MAPC was 18.2 in Q2, up from 17.7 in the same period of 2024, showcasing impressive levels of engagement.

In recent years, Uber’s revenue and operating income have soared. The business is finding remarkable success, which has supported the stock’s rise. Credit goes to the network effect, a competitive advantage that investors should understand about Uber.