Published: Mon, April 15, 2019
Finance | By Loren Pratt

Ride-hailing Giant Uber Files for IPO, Says 'May Never Make Profits'

Ride-hailing Giant Uber Files for IPO, Says 'May Never Make Profits'

Uber says it will continue to bleed cash as it seeks to recruit more drivers, find new customers, and generally grow its share of the ride-share market in its paperwork: "Many of our efforts to generate revenue are new and unproven, and any failure to adequately increase revenue or contain the related costs could prevent us from attaining or increasing profitability".

Uber's revenue grew 42 percent past year to $11.2 billion but it continued to lose money from its operations. This will return before executives head out on a so-called street series created to drum up interest in the IPO among institutional investors that will be given the first opportunity to buy the inventory before it starts trading on the New York Stock Exchange.

Nonetheless, investors should note that in the early stages of development for a company such as Uber, the consistent maintenance of high business growth is more important than risk factors, which gradually become more important as the company matures.

Uber said it operates on six continents with some 14 million trips per day and has totaled more than 10 billion rides since it was founded in 2010.

In the end, Uber is widely expected to be the biggest technology IPO since Chinese e-commerce giant Alibaba Group went public in 2014. And it is very likely to be the biggest among US tech firms because Facebook took its bow on Wall Street seven decades ago in a time when most people hadn't ever considered using an app on their smartphone to muster a ride from strangers driving their own cars.

Uber launched in 2009 as UberCab, a black vehicle service where customers could hail professional drivers with a few taps on a smartphone.

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


And the company is investing heavily in businesses in areas such as food delivery and scooters.

But Uber faces challenges that Lyft does not due to a string of revelations that sullied its reputation among consumers.

It's been a tumultuous journey for Uber to get to this point: regulatory fights, accusations of hacking and spying, sexual misconduct by top executives, allegations of harassment and gender discrimination, numerous lawsuits and fines, crimes committed by drivers (including a mass shooting), claims of stolen self-driving technology, and the ousting of the company's co-founder and CEO.

In addition to answering questions about Uber's finances, CEO Khosrowshahi will be tasked with convincing investors that he has successfully changed the culture and business practices after a series of embarrassing scandals over the last two years.

The blowback in the problems assisted Lyft pickup soil in the US and contributed to the ouster of both Uber co-founder Travis Kalanick CEO in 2017. But revenue in 2017 had more than doubled from 2016. The company resumed testing self-driving automobiles.

Alphabet, Google's parent company, owns 5% of the business as it competes with Uber on technology. Unlike Lyft, which was listed on the Nasdaq, Uber will be listed on the New York Stock Exchange, under the ticker "UBER".

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