Lyft’s head start was short-lived. In a battle of market unicorns, Uber Technologies (Uber) has filed its own draft registration statement to the US Securities and Exchange Commission (SEC) for a public listing in 2019. If all goes well, Uber’s IPO could be among the largest of all time in the US and probably the biggest in 2019 considering the listing valued the company at approximately US$120 billion.
Rival ride-hailing rival Lyft plans to list by March or April, while Uber CEO Dara Khosrowshahi’s goal is to reach the stock market in the first half of the year. Depending on the offering, Uber could rank among the Top 5 IPOs in the country if it exceeds US$17.4 billion. If the company goes over US$25 billion, that would make it the largest offering ever, beating Alibaba.
JP Morgan will function as Lyft’s right-hand bank through the IPO, while Uber will be supported by Morgan Stanley. The bank is currently ranked second according to Bloomberg in terms of its involvement in US IPOs. It has already advised the company on the road toward this initial proposal and will do so again through the IPO. Ranked first, Goldman Sachs is also expected to participate in the offering but Morgan Stanley will be the one taking the largest share in Uber’s IPO.
Since its founding, Uber has been a disruptor both as a technology and a mobility company. “Uber was born out of the necessity for an alternative to public transportation and private-vehicle use but we never thought we would become part of the solution of a much wider mobility problem,” said Federico Ranero, General Manager of Uber Mexico to Mexico Automotive Review 2019. “Uber has become a key element in our users’ lives and thanks to that, we have contributed to improving the living conditions of the cities where we are present.”
While that may be true, the company has also faced challenges while making its vision a reality. On the management side, Uber’s founder and CEO, Travis Kalanick, took a lot of heat before abandoning his position after making various judgement calls that hurt the company’s reputation, among them agreeing to be part of US President Donald Trump’s advisory council and getting into a fight with an Uber driver. Economically speaking, even though the company has been a successful venture in most countries, becoming the undisputable leader in ride-hailing services in most of them, the company has also burned most of its resources. Although the company reported revenue of US$2.95 billion in 3Q18, it also reported a net loss of US$1.1 billion.
The arrival of Khosrowshahi brought some stability and peace of mind to the board and early investors but the company is still struggling to make Uber a profitable business. Now, stockholders will have to choose whether to invest or not in a disruptive and potentially risky venture. Time will tell what the future holds for this unicorn.
The data used in this article was sourced from Mexico Automotive Review, Automotive News and Bloomberg.