Uber files to go public as losses mount

Sunday, 14 Apr, 2019

Uber could finally start going public on Thursday-and the company hopes to achieve one of the biggest tech IPOs in history. The company will have to increase its revenue and decrease its expenses to achieve profitability in many markets, including the U.S., the company says in its document. Previous year the company lost more than $3 billion from operations.

A key question facing Uber now is if it wants to keep pouring funds into its unprofitable ride-hailing business or redirect the tons of cash from its IPO into more profitable ventures such as Uber Eats food delivery startup.

The company posted a profit of $997 million past year, but that doesn't mean its ride-hailing service suddenly started to make money - far from it.

The firm reported an adjusted loss before interest and tax of $1.9bn for 2018, and forecast its operating expenses "to increase significantly in the foreseeable future". The company's shares are set to begin trading next month on the New York Stock Exchange under the symbol UBER.

Uber's float will be the largest since Alibaba, the Chinese ecommerce conglomerate, listed on the Nasdaq exchange in 2014, raising a record $25 billion.

Although Uber is no longer targeting a $120 billion valuation in the IPO, some stock bonuses to Chief Executive Dara Khosrowshahi and other company executives are only triggered when that valuation is reached.

As is the case for Lyft, Uber has so far been losing money.

To lessen the surprise of its losses when it did finally go public, Uber has disclosed its quarterly results for two years even though, as a privately held company, it was not obligated to do so.

Uber has finally let us peek inside its business.

Uber also engages in some sleight of hand about the ties connecting all its businesses.

The expert, installed as part of Uber's settlement with Waymo, has identified on an interim basis certain functions in Uber's autonomous vehicle software that "are problematic and other functions that are not", Uber said. I'm not sure I've ever read a more sprawling IPO document, which reflects Uber's sprawl.

To Uber's credit, it is firing off a cannon-sized number of metrics at investors.

The blowback from the problems helped Lyft pick up ground in the US - something Uber acknowledged in its filing - and led to the ouster of Uber co-founder Travis Kalanick as CEO in 2017.

Uber officially filed paperwork with federal regulators on Thursday, giving investors an inside financial snapshot of the global ride-hailing giant ahead of its debut on the public market this spring.

The company also has high hopes for electric bikes and scooters that it operates in dozens of cities under its Jump brand.