Uber IPO: Six things you need to know

by Ben Pena April 15, 2019, 1:00
Uber IPO: Six things you need to know

Nonetheless, investors should note that in the early stages of development for a company such as Uber, the consistent maintenance of high business growth is more important than risk factors, which gradually become more important as the company matures.

The big picture: Early estimates suggest Uber could be prepared to raise as much as $10 billion.

Lyft, Uber's direct competitor, went public last month, and since, its stock has dropped more than 20 per cent.

The insightful document doesn't reveal Uber's planned share price or the date in which shares will be available to purchase. The positive result stemmed from a windfall which Uber made from the selling of its operations in Russian Federation and Southeast Asia.

Lyft beat Uber to the stock exchange last month with an IPO that raised $2.3 billion, but its shares have been backsliding following an early run-up.

Uber launched as a vehicle service where customers are able to hail drivers with a couple taps on a smartphone as UberCab, in 2009. Its title shortened from 2010, distancing itself from the taxicab business, which has been criticized the firm for operating under less regulation than the traditional cab market.

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Uber is also expanding in markets like food shipping and cargo whilst offering methods to get around with scooters and bicycles. Its food delivery business, which spans 500 cities doubled its revenue in 2018 to $757 million from $367 million in 2017.

But Uber faces challenges that Lyft doesn't because of a series of damaging revelations that sullied its reputation among consumers. The setbacks have contained uncontrolled sexual harassment and allegations it destroys self-driving vehicle technology. Now it will be up to the successor, Khosrowshahi of Kalanick, to convince investors who Uber has cleaned up its act and values that a market value greater than Ford Motor and General Motors combined. Khosrowshahi joined Uber in 2017 to replace company co-founder Travis Kalanick who was ousted as CEO.

Cayman, a subsidiary of Softbank, is Uber's biggest shareholder with 16 percent. Ola has been raising capital from new investors to fight Uber. It launched its first self-driving test vehicle in 2016 and its self-driving auto division has more than 1,000 employees, and it has built more than 250 self-driving cars so far. The company has gradually resumed testing, and is now operating only a handful of vehicles in a small geographic area in Pittsburgh. Further, any such reclassification would require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition.

Alphabet, the parent company of Google, owns 5% of Uber, even as it competes with Uber on self-driving technology.

Daniel Ives of Wedbush Securities noted that the ride-hailing firms will face competition from other autonomous driving firms including the former Google auto unit Waymo.

Uber's home market rival Lyft (LYFT) had almost 18.6 million active riders in the fourth quarter, much lower than Uber's 91 million.

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