Uber is heading into its IPO with engine trouble

The road ahead.
The road ahead.
Image: Reuters/Shannon Stapleton
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Is Uber stalling?

The ride-hailing company has high aspirations as it gears up for its initial public offering, with a possible valuation of around $90 billion. It is skidding into its listing, though, by revealing a deceleration in bookings and revenue that may ring alarms for investors.

According to an amended S-1 filing published today, growth in Uber’s gross bookings and revenue both slowed down in the first quarter of this year. The company also recorded a $1 billion loss in the quarter, though losing money is nothing new for Uber. The top-line weakness may be more worrying, with first-quarter gross bookings—what customers spend on Uber rides, Uber Eats orders, and other Uber services—growing by 33% year over year, down from nearly 60% in the same quarter last year.

Uber’s first-quarter revenue—what it keeps from bookings after paying out wages to drivers and delivery people—grew by around 20%, down from 70% in the same quarter last year.

Uber’s cash burn can’t last forever, and slowing sales growth won’t help it when it comes to raising the most money possible at a lofty valuation. The Wild West days of sexual harassment allegations, data breaches, attempts to evade authorities, and allegations of bribery may be behind it, but they cast a long shadow. The travails of rival Lyft since it listed in late March don’t set a great precedent—its shares are down more than 20% from the IPO price.

Over the next two weeks, according to Reuters, Uber’s management will hit the road to meet and pitch to potential investors, before setting an initial share price on May 9. It will begin trading the following day on the New York Stock Exchange under the symbol “UBER.”

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