- Uber is expected to file its initial-public-offering documents as soon as Thursday.
- The company will follow its biggest competitor, Lyft, to public markets, though Uber’s offering could be 10 times as big.
- Uber’s IPO could be one of the largest in history. Here’s a rundown of what Wall Street is expecting from the company’s wide range of businesses and bets.
- UPDATE: Uber has filed its document to go public. Find Business Insider’s full coverage here.
The ride-hailing giant’s IPO is expected to be one of the largest in years, and it could raise the tech unicorn more than $US10 billion to continue its global expansion, but there’s one big cloud casting a shadow on everything: Lyft.
Uber’s biggest competitor has about a 35% market share in the United States, and it beat the company to public markets last month, netting a valuation of about $US18 billion. In their first two trading weeks, however, shares of Lyft have fallen by more than 20%, despite an oversubscribed IPO that initially traded well above its initial price.
Both companies are deeply unprofitable – and provide largely the same basic services – so the competition comes down to driver pay, market share, and other factors that can help get the companies to positive cash flow.
“The primary issue is around the underlying metrics that Uber will discuss around take rates, ride sharing data, driver ecosystem, and a myriad of other metrics relative to Lyft which may put the company in a more negative light,” Daniel Ives, an analyst at Wedbush, said in a note to clients Thursday.
Still, Uber is most likely a first choice for many investors thanks not only to its global scale (compared with Lyft’s North America focus) but to its other pursuits including food delivery, self-driving cars, and flying taxis.
Uber for everything
All of those other bets rely on the theory that Uber’s platform that now provides taxi rides at the touch of a button (and public transit in one city) can be used for a multitude of other services.
Uber Eats, the company’s food-delivery service, is active in more than 350 markets across dozens of countries. A company executive told Business Insider in March that the service showcased the “power of the Uber platform.” The company also allows Uber for Business clients to order expensed meals, and it is gearing up for groceries soon.
Then there’s the company’s Advanced Technology Group, which is working to develop self-driving cars at its offices in Pittsburgh, Toronto, and San Francisco. A high-profile crash in Arizona that killed a pedestrian in March 2018 brought massive amounts of scrutiny to the program and caused Uber to temporarily remove its autonomous vehicles from roads where they were operating.
The company is back to testing, Uber’s chief self-driving scientist said on Tuesday, and the company is still investing massive amounts of capital into the software and hardware for what it hopes will eventually be an autonomous fleet. After all, many view self-driving cars as the company’s only way to profitability given that driver pay is one of Uber’s biggest expenses.
But its bets don’t stop at autonomous taxis. Uber’s new mobility unit is working to advance its bike and scooter offerings, which began with the company’s purchase of Jump last year. Most recently, its scooters launched in several places including London and Washington, DC. The group, overseen by Rachel Holt in Washington, has also launched a public-transit integration in Denver, where Uber customers can see options for trains and buses in addition to car rides. The service, which is powered by the Israeli tech startup Moovit, also allows users to purchase train tickets using the Uber app.
In the skies, Uber Elevate is working on flying taxis. The group is now overseen by Eric Allison, who previously oversaw the flying-car company created by Larry Page called Zee Aero. Allison took over from Jeff Holden as chief product officer in 2018, shortly after the company’s annual elevate conference in Los Angeles. This year’s elevate conference is set for June in Washington.
For now, it’s all about rides
But until those moon-shot services are making money, investors will most likely be focused on the company’s main ride-hailing business.
In that area, a major focus for both Uber and Lyft will continue to be the amount drivers are paid. The two companies have fought hard to maintain drivers’ status as independent contractors, who are not entitled to the same benefits that a full-time employee would.
Under the leadership of CEO Travis Kalanick, its founder, Uber slogged through scandals that resulted in a huge bump for Lyft. For more than a year, Lyft worked to project itself as the more driver-friendly alternative, and it even disclosed in its IPO filings that it got a big boost from Uber’s missteps.
Now, under the leadership of Dara Khosrowshahi, who took over as CEO from Kalanick in 2017, Uber has taken a different approach. The former Expedia executive summed up the change in one simple sentence: “We do the right thing. Period.”
More Uber coverage:
- Uber’s original pitch deck from a decade ago shows just how much the ride-hailing giant has changed
- Here’s how Uber and Lyft’s financials compare as the two companies go public
- Read the email Uber’s CEO sent employees about the company’s $US3.1 billion acquisition of a major competitor
- Uber plans to sell around $US10 billion worth of stock in its IPO, seeks $US90 billion valuation
- Uber’s chief self-driving scientist reveals how different the world will look when autonomous cars eventually roll out
- The death of a college student who got into a car she thought was an Uber could spark a crackdown for ride-hailing safety
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