Uber files for the most-hyped IPO of the year
Uber filed to go public, but it's got a few more items to check off before it gets to ring the bell at the New York Stock Exchange, likely sometime in early May.
Road show: Uber will present its financial information to potential investors, who will decide whether they want to participate in the initial public offering.
Initial price range: The company will set a range at which it hopes to sell the stock — generally a conservative range. It's always a nice look when the price goes higher.
Revised price range: Uber may adjust its price once or a few times, depending on investors' interest.
Final price and IPO: Uber will announce the final price and hold its IPO the day before the stock begins trading on Wall Street.
Stock starts trading: IPO investors will get a chance to put their shares on the open market. The stock will start trading a few hours into the session on Uber's IPO day.
Here's are some of the legal issues Uber is grappling with, according to its S-1.
- Driver classification: 60,000 drivers who had entered into arbitration agreements have filed, or said they plan to file, demands asserting that they have been misclassified as independent contractors. Uber agreed to a $20 million settlement with thousands of drivers in Massachusetts and California earlier this year over a similar claim.
- Government investigation over 2016 data breach: Uber says its facing ongoing criminal inquiries and investigations by the US Justice Department, as well as from other government agencies, in the United States and abroad.
Companies are obligated to tell investors why giving them money might be a risky proposition. Uber, which has never turned a profit and said it may never earn any money, could be a particularly risky company to invest in.
Uber has said this before, but it is spending like crazy to stay ahead of the competition, expand into new cities and develop driverless cars. Those aren't cheap, and Uber said it may never turn a profit.
Uber really wants to keep its drivers classified as contractors, because it doesn't have to pay them benefits. But drivers, activists and some lawmakers have pushed for Uber drivers to gain employee status.
Uber's sexual assault and harassment crises and its workplace culture problems have clouded the public's view of the company. It's trying to win the public back with a new CEO and a campaign to restore its image. It may not succeed.
The future of driving is robotic. Uber is among the leaders in self-driving car technology testing, but a fatal accident last year has stymied its progress. Its competitors are deep-pocketed.
You may think of Uber as an app for hailing a car, but the company is betting it can provide more services. Chief among them: delivering food to your door.
In its filing to go public, Uber revealed that its meal delivery service, Uber Eats, generated nearly $1.5 billion in 2018, up from $587 million the year before. More than 15 million customers received a meal from Uber in the fourth quarter of 2018.
Uber faces stiff competition in the meal delivery market, but the company thinks it has a leg up on its rivals. "We believe that our scale enables the average delivery time for Uber Eats to be faster than the average delivery time for our competitors."
Uber and Lyft are obviously similar companies. But their filings to go public differ in some subtle but telling ways.
- Uber mentioned "Lyft" six times in its filing to go public. Lyft mentioned "Uber" 15 times.
- Lyft mentioned "safety" 45 times. Uber: 80 times.
- Lyft referred to "scooters" 127 times. Uber mentioned "scooters" (typically "e-scooters") 67 times.
- Uber mentioned "meal delivery" 56 times. Lyft never mentioned about it at all.
Uber's single largest shareholder isn't the company's founder or even the venture capital firm that was Uber's earliest investor.
SoftBank, Masa Son's tech conglomerate, is Uber's biggest shareholder. SoftBank amassed a 16.3% stake in the company since December 2017.
But other people and companies will be worth a lot of money when Uber goes public.
-- Matt Cohler, the head of Venture Capital firm Benchmark, owns 11% of the company
-- Travis Kalanick, Uber's founder, owns 8.6%
-- Garrett Camp, head of tech consultancy Expa, owns 6%
-- The Saudi Public Investment Fund owns 5.3%
-- Alphabet, Google's parent company, owns 5.2%
-- Ryan Graves, Uber's CEO in 2010, owns 2.4%
- 2018 revenue: $11.3 billion (⬆️ 42%)
- 2018 adjusted net loss: $1.8 billion (⬇️ 30%)
- Drivers: 3.9 million drivers*
- Customers trips: 1.5 billion*
- Average wait time for riders: 5 minutes*
* Fourth quarter of 2018