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The road ahead.
YOUR IPO IS ARRIVING SOON

Everything you need to know about the $100 billion Uber IPO

By Mike Murphy

Uber on April 11 filed documents to go public, and within those hundreds of pages revealed key insights about the company, its future, and its competition.

Here’s a quick rundown of everything you need to know about Uber’s forthcoming IPO, gathered from Quartz’s reporting:

We don’t know much about the average Uber rider

Unlike many tech companies that have gone public in recent years, including Uber’s main US competitor, Lyft, Uber revealed very little about the sorts of people who use its services. It didn’t even clearly break out how many people take rides each month, instead lumping Uber riders and people who have used its delivery service, Uber Eats, into one metric called “MAPCs,” or Monthly Active Platform Consumers. It had 91 million of those on Dec. 31, 2018.

Uber thinks just about everyone is a competitor

Perhaps Uber’s lawyers were just trying to cover every conceivable base in its filings, but the company listed quite the eclectic mix of competitors, including:

  • Apple
  • Amazon
  • Tesla
  • DHL
  • Skip scooters
  • restaurants
  • grocery stores
  • meal-prep kits
  • the bus

This is partially because Uber is more than just a ride-sharing platform. It delivers meals to 15 million customers each month, and recently jumped into bike- and scooter-sharing services. Uber also runs autonomous-vehicle research, and a nascent freight trucking business, so perhaps it’s not that strange for it to see all these things as competition.

Uber loses an absolute ton of money

If you thought other tech unicorns going public—or even Amazon!—knew how to lose money, you haven’t seen anything yet. As Quartz’s Alison Griswold notes, Uber did make $997 million in 2018, thanks mainly to selling international ventures, but from 2014 to 2018, the company lost a total of $6.8 billion.

The Saudi government and Alphabet are big winners in Uber’s IPO

When Uber lists on the New York Stock Exchange, it’s going to make a lot of people rich. Ousted Uber founder Travis Kalanick is one of the company’s largest personal stockholders, with nearly 120 million shares, whereas current CEO Dara Khosrowshahi has only 196,000 shares, and board member Arianna Huffington has 22,000 shares.

The largest stockholder is listed as “SB Cayman 2 Ltd,” an investment subsidiary of Japanese tech giant SoftBank, which holds over 222 million shares in the company, or about 16% of its stock. The second-largest stockholder is Matt Cohler, one of the first Facebook employees, and Benchmark Capital, where Cohler is a general partner. Benchmark invested in Uber during its Series A round of funding in 2011.

Alphabet, as part of a settlement with Uber over a former employee accused of stealing trade secrets from Waymo, Alphabet’s self-driving car subsidiary, when he left for Uber, received a 5.2% stake in the company, which is slightly less than the 5.3% that the sovereign wealth fund of the Kingdom of Saudi Arabia currently holds.

Uber sees airports, violent drivers, and the company itself as risk factors

Quartz used a machine-learning algorithm developed by Jeremy B. Merrill in our AI studio to figure out what Uber is worried about. The AI compared risk factors listed in years of annual reports from companies in the S&P 500 against those listed in Uber’s S-1 to find out which words were most unique. It uncovered a few surprising discoveries. A large portion of Uber’s business—15% of its bookings—come from trips to and from airports, so if the company is forced out of airports, as it has been in some cities in the past, it will certainly struggle. Uber also sees violent and criminal incidents with riders and drivers as large risks, as well as the company’s own culture. Which brings us to…

Uber itself may hinder Uber’s chances of survival

The company has had a… rocky… few years. In 2017 alone, it dealt with: the #DeleteUber campaign that led hundreds of thousands of consumers to cancel their accounts within days; former Uber engineer Susan Fowler’s blog post that alleged sexual harassment; the “greyball” tool that led to a federal probe in the US; the trade secrets lawsuit with Waymo; and a massive security breach that it had tried to pay to cover up.

While Khosrowshahi has made swift changes after replacing Kalanick in June 2017, there is still a lot of work to do to change the company’s culture, and to win back customers’ trust.

Uber plans to let its shareholders have a say in the business

Unlike many other tech companies that have gone public in the last decade, Uber did not decide to keep control of the company within the grasp of those who controlled it before the IPO. As Griswold noted, “Uber reformed its voting structure in 2017, stripping super-voting rights from co-founder Travis Kalanick and other early shareholders as part of a major investment by Softbank.”

This means if you have a share in Uber, regardless of who you are, you have the same rights as anyone else—one share, one vote.

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