Uber Plans to Go Public
Uber was created in San Francisco back in 2009 as a vehicle-for-hire app and became the "gig economy" company with an independently contracted workforce providing rides. After Thursday's filing, the company is expected to start publicly trading in May. Uber's smaller competitor Lyft went public as the first ride-hailing app with a $24 billion valuation last month.
Investors are very excited about the possibility of an initial public offering for ride-sharing services Uber and Lyft at some point in 2019. And for good reason: Uber could be on its way toward a valuation of more than $120 billion (Uber currently has a valuation of $70 billion, which makes it the most highly valued startup in the world. The company has raised more than $10 billion in capital since its founding in 2009), according to reports. But how can average investors get in on the company before the IPO (Initial public offering)? CEO Dara Khosrowshahi confirmed on Thursday that the company's "target" is to go public in 2019. On that day, the files were released in order to go public. The move is a departure from his predecessor, Uber co-founder Travis Kalanick, who had tried to put off an IPO as long as possible.
"We have all of the disadvantages of being a public company, as far as the spotlight on us, without any of the advantages of being a public company," Khosrowshahi said on stage at the New York Times DealBook Conference in Manhattan. The IPO caps off Uber's rapid and very public effort to overhaul its internal culture and move past a long list of scandals that upended the company. But as it prepares to go public, Uber continues to face challenges.
Uber continues to find itself in the spotlight over unflattering incidents, ranging from a pedestrian being struck and killed by one of its self-driving vehicles to a CNN investigation into sexual assault and abuse by ride-hailing drivers.
In his letter to shareholders in the company's IPO filing, Uber CEO Dara Khosrowshahi admitted to the company making "missteps" on its road to go public. "Of course, in getting from point A to point B we didn't get everything right," he wrote. "Some of the attributes that made Uber a wildly successful startup-a fierce sense of entrepreneurialism, our willingness to take risks that others might not, and that famous Uber hustle-led to missteps along the way. "In fact, when I joined Uber as CEO, many people asked me why I would leave the stability of my previous job for one that was anything but. My answer was simple: Uber is a once-in-a-generation company, and the opportunity ahead of it is enormous."
Let’s talk some numbers; the company lost $1.8 billion in 2018, an unprecedented sum for a company about to go public. The filing noted its revenue was up 42% in 2018 to $11.3 billion. In its fourth quarter, Uber had 3.9 million drivers on its platform and users took 1.5 billion trips.
The astounding numbers of drivers as well as people give good news to the investors who know that this will only be on a steady rise for quite some time, making it inevitable that going public would cause chaos amongst investors.