Uber IPO: Six things you need to know

Marco Green
April 14, 2019

The positive result stemmed that Uber made from the selling of its operations in Russian Federation and Southeast Asia. Its fast-growing food delivery business, which spans 500 cities globally, doubled its revenue to $757 million in 2018 from $367 million in 2017.

Uber was investing in self-driving vehicles, which may be vital to attaining profitability and reducing motorist costs.

Unlike Lyft, which was listed on the Nasdaq, Uber will be listed on the New York Stock Exchange, under the ticker "UBER". "If you can't talk about earnings, you better have a plan to talk about a platform, because that's the only way investors will feel comfortable with losses".

It's hard to what, if any, change Uber's IPO will have on riders. The company reportedly hopes to sell about $10 billion worth of stock, according to Reuters. Uber hasn't decided on a price range, the people said. For the IPO, the company has enlisted the help of Morgan Stanley, Goldman Sachs, Bank of America Merrill Lynch, Barclays, Citigroup, and Allen & Company.

The food deliverer also confirmed what the restaurant industry has known for some time: Chain partners pay discounted rates for Uber Eats' services that are less than the 30 percent commission fees it demands from smaller unit restaurants on its platform.

While revenue growth in its ride-hailing business slowed, its food delivery service, Uber Eats, is soaring.

Paying drivers is a huge expense, and Uber's fierce competition with Lyft for customers has led both companies to offer rides below cost.

It's impossible to think about Uber's upcoming IPO without putting it in context of its rival Lyft, which also went public earlier this year. The shares jumped 21 percent at the opening bell in their trading debut but have sunk since then, closing at $59.90 on Friday. Chief Executive Officer Dara Khosrowshahi came from Expedia Group Inc.in 2017. The company said in the filing that it lost US$1.8 billion past year, excluding certain transactions, on revenue of US$11.3 billion. While the gap between India and other markets is significant, Uber did not give country-wise breakup in continents like Europe or Africa.

The breakdown reveals Uber has been producing. The company said it sustained an operating loss of $3 billion. The profit was mainly driven by Uber's sale of assets in Southeast Asia and Russian Federation as well as an increase in estimated value of its stock in Didi Chuxing, China's largest ride-hailing company, which Uber sold its Chinese business to in 2016.

Its history that is unprofitable could induce its prices that are ride-hailing to be finally raised by Uber unless it expand to other markets and lines of business or could reduce its costs by shifting to cars.

The ride-hailing service revealed that in 2018, gross bookings climbed to $49.8 billion, a 45 percent increase from the $34.4 billion generated a year earlier.

Tellingly, the word "platform" appears more than 700 times in the filing.

Uber had not disclosed the latest user numbers before, and the figure indicates the scale of the business.

Other reports by Click Lancashire

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