In a rather quiet move, Uber Technologies filed controversial paperwork for an initial public offering (IPO), according to a few people with intimate knowledge of the company’s prospects. This, of course, takes the ride-hailing company closer to a major milestone for one of Silicon Valley’s most closely watched—and most controversial—companies.
Now, Uber Technologies’ IPO filing comes only a day or so after Lyft filed their IPO, so this move is right in line with the long protracted battle between the competitors. Indeed, Uber and Lyft have been fierce rivals in this emerging business, and they do often roll out identical (or near-) services to remain in the competition. Uber, of course, is going to want to beat Lyft to Wall Street, to capture the most eager ride-sharing app investors.
The Uber IPO filing definitely establishes one of the biggest tech listings in history. In its most recent private finance analysis, Uber had a valuation of $76 billion. Some speculate, however, that it could be worth as much as $120 billion as an IPO. With a listing at the beginning of the year, it will be the biggest amount in what many expect to be a series of public debuts among those highly-coveted companies in Silicon Valley. This will include the likes of private apartment-renting company Airbnb as well as the workplace messaging services known as Slack.
Some argue, though, that Uber’s IPO will act as a test of public market investor tolerance for the Uber’s workplace and legal controversies. These controversies were all over the news last year. Furthermore, we have yet to see how the public will react to Chief Executive Dara Khosrowshahi’s efforts to turn the company around amid these controversies; and the IPO will also test these reactions.
Khosrowshahi took over a little more than a year ago and has long been vocal about his wishes to take the company public, with a goal of 2019. And then in August, he supported this promise by hiring the company’s first chief financial officer in nearly four years.
Even though ride-hailing apps have been extremely popular since their launch about ten years ago, the business has been mostly unprofitable. For example, Uber lost $1.07 billion in the third quarter, this year, and continues to struggle in terms of growth, even though its gross bookings reflect a company of larger scale (at $12.7 billion). Q3 revenue was up 5 percent, to $2.95 billion.