Uber IPO: Six things you need to know

In IPO filing, Uber calls out Seattle and warns ‘regulatory risks’ in big cities could impact bottom line
Uber files paperwork for its initial public offering
Author

15 April, 2019

While Uber's competitor, another prominent ridesharing company, Lyft, already went public at the end of March under the thicker (LYFT), raising 2.3 billion dollars at the price of 72$ per share, investors are eager to see whether Uber will encounter an equal enthusiasm in the market once the company goes public.

USE OF CASH RISKY Uber said the contribution of cash-paid trips may increase in the future but flagged regulatory, operational and safety concerns related to the payment method. For ride-sharing specifically, revenue increased 33% year over year to $9.2 billion in 2018.

As Uber continue to prioritise growth over profits, the ride-hailing giant's revenue has plateaued.

Analysts have warned that Uber and Lyft face a hard road to profitability amid challenges from regulators and established taxi operators around the world. Although its user base consists of customers of other services and ride-sharing, the number is nearly five times the 18.6 million announced by competitor Lyft Inc.

Media reports this week said the San Francisco-based company seeks to sell about $10 billion worth of stock, valuing the stock between $90 billion and $100 billion.

That's below earlier estimates of $120 billion.

In its initial public offering filing on Thursday, Uber revealed that Japan's SoftBank Group Corp. -controlled SoftBank Vision Fund was its largest shareholder with a 16 percent stake.

After making the public filing, Uber will start a series of investor presentations, called a roadshow, which according to the Reuters will start the week of April 29. Uber applied to list its common stock on the New York Stock Exchange under the symbol "UBER".

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Analysts at one City broker have warned that Uber Technologies Inc's upcoming IPO could spell bad news for online takeaway marketplace Just Eat PLC (LON:JE.). Last year, its revenue rose 42 per cent to US$11.3 billion from a year earlier.

Uber have fallen behind slightly in the race to create self-driving cars.

Uber revealed in the filing it could have to pay a license fee to Waymo or face a substantial delay to the development of its self-driving technology if the initial assessment of its technology by an independent expert is confirmed. Now it will be up to Kalanick's successor, Khosrowshahi, to persuade investors that Uber has cleaned up its act and merits a market value higher than Ford Motor and General Motors combined.

Queries are appearing into the use of duplicitous software of Uber to fool authorities regulators.

The blowback from the problems assisted Lyft pickup ground in the US - a thing Uber acknowledged in its own filing - and contributed to the ouster of both Uber co-founder Travis Kalanick since CEO in 2017.

Its history that is unprofitable could induce its prices that are ride-hailing to be finally raised by Uber unless it expand to other markets and lines of business or could reduce its costs by shifting to cars.

In 2017 Uber's toxic culture resulted in a campaign that saw hundreds of thousands of people delete their accounts, an issue that is addressed in their IPO.

Rostan added that both firms will be seeking to step up growth and that "i it turns into a market share fight between Uber and Lyft, profitability is going to be tough".


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