Ride hailing service Uber is prepared to make public intimate and potentially colorful details about its business on Thursday as it gets ready to become a public company. The 10-year-old company that has transformed the taxi industry will become the latest Silicon Valley “unicorn” – a private company worth over $1bn – to test the stock markets appetite for loss-making tech companies. In a filing with the Securities and Exchange Commission (SEC), Uber is expected to give the latest details on its huge losses, $1.8bn last year, its growth and the raft of legal issues it faces. The company is reportedly aiming for a valuation of close to $100bn – more than the combined value of General Motors and Ford. But at $100bn Uber would still be worth less than the $120bn estimated value its bankers had attached to the company last year. Uber is entering a stock market that is showing signs of tiring with loss-making unicorns. Lyft, Uber’s smaller rival, went public two weeks ago and has struggled to maintain its initial valuation. Its stock was initially priced at $72, but now stands at around $60. Uber’s share sale is expected later this month and the company’s executives are embarking on an investor roadshow designed to tempt institutional investors to buy into the company. Uber is a more complex and unpredictable prospect for investors. The company has burning cash as it fights to grow its market share and to expand into new businesses, including self-driving vehicles and deliveries. Its losses fell 15% last year, but Uber’s growth also slowed toward the end of 2018 to 25% year-over year, an impressive figure, but less than the 38% for the third quarter and only about half the rate of six months prior, according to Bloomberg. Overall, the company reported revenue of $11.3bn in 2018, up 43% over the previous year, with gross revenue from fares before payouts to drivers grew to $50bn. While the company, like Amazon and other tech giants that have gone on to be big money makers, continues to emphasize growth over profitability, that may not reassure investors who have recently been punishing loss making tech companies. Two years ago, investors rushed to invest in Snap Inc, parent company of the Snapchat app, for $17 a share. The company has lost money since 2011 and lost $1.3bn last year, driving the share price down to around $11. A stampede of unicorns coming to market this year, including Airbnb, Palantir, Pinterest, Slack, Uber, WeWork and more than 200 other companies, could find the pastures less hospitable than they anticipated. To boost investor confidence, Uber is spending around $1bn this year on food delivery, freight transport, electric bikes and self-driving cars, capital intensive moves designed to position the company as a broad platform for all-manner of transportation but come with no guarantee of long-term profitability. Uber’s offering is complex for other reasons, too. While Uber CEO Dara Khosrowshahi has worked hard to convince investors and the public that the company’s boorish, male-dominated culture has changed, a cloud of scandal still hangs over the company. Those include a series of sexual harassment allegations, overseas bribery, a data breach that was concealed from regulators and the use of illicit software to evade authorities. The company has also clashed with drivers who have accused the company of driving down their wages to grow its business. “Uber’s legal issues are unusual, even extraordinary, and some are endemic to the operations,” said Carl Tobias, corporate governance expert at University of Richmond. “The company has been compromised by corporate governance issues that appear to have been settled, though that not entirely clear, but its labor issues are very difficult to address and could be around for a longtime in the US and everywhere else.” The prospectus documents released today are likely to include disclosures on its pending lawsuits and government investigations, a hangover from the era when under Travis Kalanick, the former CEO who was filmed berating an Uber driver and accused of promoting a sexist culture that spawned an #deleteUber movement. To date, the company has paid out around $10m to settle pay discrimination claims, including $1.9m earmarked for harassment allegations, after settling complaints brought by women who said they were raped or assaulted by Uber drivers But there is also likely to be reference to Uber’s reliance on a workforce – its drivers – that the company does not consider employees and maintains therefore has no larger obligation toward in terms of minimum pay and benefits. In March Uber agreed to pay $20m to settle a long-running fight with drivers in California and Massachusetts who were pushing to be considered employees. In Germany, Uber was briefly forced to stop operating after regulators found it was operating an illegal taxi service. In addition, Uber has been at the centre of at least five US Department of Justice investigations, including violations of the Foreign Corrupt Practices Act, using software to evade regulators and spying on competitors.


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