Uber unveils IPO with warning it may never make a profit

"In India, for example, our Uber Eats offering competes with Swiggy and Zomato, each of which has substantial market-specific knowledge and established relationships with local restaurants, affording them significant product advantages".

Uber released its IPO filing, and it is seeking to raise $1 billion.

The move comes after a lackluster market debut for Uber's United States rival Lyft, which has lost more than 10 percent of its value since its IPO last month.

The insightful document doesn't reveal Uber's planned share price or the date in which shares will be available to purchase. The company is planning to spend $1 billion next year on original content and expects to have between 60 million and 90 million subscribers within five years. That will come before executives head out on a so-called road show created to drum up interest in the IPO among institutional investors who will be given the first opportunity to buy the stock before it begins trading on the New York Stock Exchange next month.

In the end, Uber is broadly expected to be the largest tech IPO since Chinese e-commerce giant Alibaba Group went public in 2014. And it's likely to be the largest among USA tech companies since Facebook took its bow on Wall Street seven years ago at a time when most people hadn't ever considered using an app on their smartphone to summon a ride from strangers driving their own cars. The company said it sustained an operating loss of $3 billion. It shortened its title in 2010 to Uber, distancing itself in the taxicab industry, which has been criticized the company for facing regulation compared to the cab industry.

When offering ways to get around with scooters and bicycles uber is growing in other markets such as cargo.

But Uber faces challenges that Lyft does not due to a string of revelations that sullied its reputation among consumers. Travis Kalanick, who was ousted as CEO in 2017 but still owns 8.3 percent of the company's pre-IPO shares valued at roughly $9 billion, will likely see his wealth multiply by billions of dollars.

In addition to answering questions about Uber's finances, CEO Khosrowshahi will be tasked with convincing investors that he has successfully changed the culture and business practices after a series of embarrassing scandals over the last two years.

Cayman, a subsidiary of Softbank, is Uber's biggest shareholder with 16 percent.

Uber was investing in self-driving vehicles, which may be vital to attaining profitability and reducing motorist costs. It launched its first self-driving test vehicle in 2016 and its self-driving auto division has more than 1,000 employees, and it has built more than 250 self-driving cars so far.

However, it frozen testing when past year one of its vehicles that were self-driving struck and killed a pedestrian at Arizona. Additional regulation of our pricing model could increase our operating costs and adversely affect our business. The company resumed testing self-driving vehicles in Pittsburgh in December. Uber notes that Waymo has already introduced a limited ride-hailing service in Arizona, and concedes that other competitors could launch similar services before Uber can do the same.

Uber's home market rival Lyft (LYFT) had almost 18.6 million active riders in the fourth quarter, much lower than Uber's 91 million.

  • Anthony Vega