Uber filed documents Thursday to take the ride-hailing giant public, the most anticipated of the year’s high-profile technology stock-exchange listings.
It’s a watershed moment for Uber, which said its stock market symbol would be UBER. The company is expected to list its shares on May 10 as it seeks to raise funding in the neighborhood of $10 billion at a $100 billion valuation.
Since its launch in 2009, Uber has worked toward global dominance of the ride-hailing industry through a cash-burning strategy of investor-subsidized fares. Uber operates in 63 countries and has millions of customers. By the end of 2018, 74 percent of its trips were taking place outside the United States, Uber said in its filing.
It has also expanded its business in recent years to include food delivery, self-driving vehicles and alternatives to car transport such as bikes and scooters. One of the pioneers of the gig economy, Uber has grown to rely on contracted drivers – the company said it had 3.9 million at the end of 2018.
However, Uber has struggled to stem billions of dollars in losses and has been forced to exit some markets, caving to competition from local rivals.
In documents released Thursday, Uber said its revenue last year rose 42 percent to reach $11.3 billion, with $1 billion in profit, derived from selling some of its overseas businesses. Its operating losses last year totaled $1.8 billion.
With the initial filing — prior to pricing its shares and valuing its company — Uber has entered the first stage of taking its company public. After pricing its shares later this month the company will enter an investor road show along with a “quiet period” typically preceding an initially public offering.
Uber for years has been one of the most highly valued of a crop of venture-backed start-ups that includes its smaller North American rival Lyft, which went public last month, the bookmarking site Pinterest and the room-booking service Airbnb.
But in its IPO filing, Uber positioned itself as not just a ridesharing company, but a global transportation leader – with a footprint in the freight, meal delivery and personal mobility businesses. Ridesharing makes up the core of its revenue – more than $9 billion in 2018. Uber Eats made up another $1.4 billion, revenue on a scale approaching Lyft’s $2 billion in total revenue last year.
“They want to be ubiquitous,” said Santosh Rao, the head of research for Manhattan Venture Partners, which includes Lyft in one of the funds it oversees. “They want to be everywhere and that’s what they’re banking on, so they’ll pitch that.”
In addition, doubts are growing about the viability of the ride-hailing business model, which relies on controlling a network of cars and drivers Uber pays as little as 60 cents a mile. Lyft’s shares have fallen starkly since opening at $72 in late March, closing at just over $61 Wednesday.
Uber, in its filing documents, said drivers will be a long-term priority, and it announced plans to give some drivers a piece of the wealth it is raising. Uber said it will provide a “one-time cash” bonus to more than 1 million drivers around the globe, a more than $300 million payout, on April 27. U.S. drivers will receive between $100 and $10,000, depending on how many rides they have given. In the U.S., drivers can elect to receive the bonus in cash or direct it into Uber’s directed share program to receive the equivalent amount of stock market shares.
In contrast to Lyft, which highlighted self-driving cars as its direct path to profitability — through the elimination of drivers – Uber cited the “long hybrid period of co-existence of Drivers and autonomous vehicles” but laid out situations where autonomy would be of particular use. Drivers, Uber said, are “a critical and differentiating advantage for us and will continue to be our valued partners for the long-term.”
For example, Uber said, autonomous vehicles may be deployed on trips “along a standard, well-mapped route in a predictable environment in good weather.”
“In other situations, such as those that involve substantial traffic, complex routes, or unusual weather conditions, we will continue to rely on Drivers,” Uber said. And then there are large events, such as concerts, which might overwhelm a fully autonomous network. Drivers would be deployed to relieve the network in those situations, likely for the long haul.
Uber’s growth was slowed by a raft of scandals starting in 2016 that ultimately led to the ouster of its chief executive, Travis Kalanick. Uber had been faulted for a culture of workplace sexual harassment, programs to evade regulators and a viral video of Kalanick lambasting a driver as the company faced increased scrutiny over the treatment of its contracted workforce.
Lyft went public with a relatively strong operating position in the wake of the viral #DeleteUber campaign, and it claimed to hold about 40 percent of the U.S. market share.
Dara Khosrowshahi, who formerly headed Expedia, took over Uber’s management in 2017 and has worked to restore the company’s standing with a more cautious approach on safety issues and an acknowledgment of the company’s faults. With $45 million in total compensation, Khosrowshahi ranks among the 10 highest-paid CEOs in the U.S., according to Equilar’s most recent data.
Uber operates worldwide including in Brazil, Mexico, India and across the Middle East, where it recently acquired Careem, the Dubai-based car-hire company.
Among the big winners in the offering are Japanese investor SoftBank Group which will have a stake worth roughly $16 billion; early Uber-backer Benchmark with an $11 billion stake; former CEO Kalanick with a stake worth about $8.6 billion, based on an anticipated $100 billion valuation.
Saudi Arabia’s Public Investment Fund, which drew ire after the alleged arranged killing of journalist Jamal Khashoggi, holds a stake worth $5.3 billion.
(c) 2019, The Washington Post · Faiz Siddiqui ·