Uber has caused this week a huge wave of protests by taxi drivers in Spain. The aggression of the guild to stop the expansion of the cars that use this application for the transport of passengers comes at a key moment in the short history of the company, at the doors of listing on the Stock Exchange. Uber leads through a pavés of 1.07 billion dollars of debt. That's the amount he burned in the third quarter of 2018. A year earlier he had lost 4,500 million. The interrogation is clear. Would you invest in a company where the red numbers bleed? If we listened to investment bank Morgan Stanley we would find an answer without asking. It has valued the company – despite the fact that since its birth in 2009 it has never had benefits– in 120,000 million dollars. About 105,000 million euros.
It is the figure with which it goes to its possible flotation this year (it could be delayed by the partial closure of the US government and market conditions). Perhaps the most anticipated debut in a decade. On paper, it is worth more than Ford, General Motors and Fiat Chrysler together. Although other analysts lower their price to 70,000 million. A short amount. "Uber needs at least an appraisal of 100,000 million dollars for its current investors to earn the money they expect," warns Hubert Horan, independent transport consultant, who draws the shadow over the firm: "The shares have no ability to appreciate long term based on its central taxi business. " After a decade he keeps losing more money than any start-up of history. Amazon and Facebook had a positive cash flow at five years of age. But it's the same.
The markets have faith in which the platform will achieve short-term benefits; Hope that the legislation will be more benign, and charity, in the neoliberal sense, that investors will bet their money. The company, calmly, because being private is not obliged to present results quarter by quarter, places its pieces with the precision of a surgeon. In October, and in just one week, it captured 2,000 million financing with the issuance of bonds. The opening with white of its premiere on the Stock Exchange? "I've never seen an operation like this in my 34-year career," writes Brian Reynolds, an analyst at Canaccord Genuity, in a note to clients.
Last August – when Toyota invested 500 million in it – it was valued at 76 billion. Only three months later it reached those 120,000 million dollars. Further, in these years has captured 20,000 million in funds. An unprecedented number, 2,600 times more than Amazon before its release to the market. "The profile of the company is reminiscent of other technology companies that make their debuts on the market without having ever made a profit, but with great expectations for the future; a situation that sometimes does not materialize, "says Javier Urones, an analyst at XTB. "People love buying stock of things they use," says Giles Alston, Oxford Analytica expert. Perhaps for that reason and for a great campaign "these stock market releases are very followed. Although the results will depend on the current market conditions, "predicts Celso Otero, of Renta 4. And also who comes first.
Because its competitor Lyft – which according to Credit Suisse is worth 15.100 million dollars – struggles with Uber for that position in the market. Both companies lose huge sums and have to subsidize their rates to attract drivers and passengers. But Lyft only operates in the US and Ontario (Canada), while Uber travels through 63 countries and provides 15 million daily trips. They seem to revive the fight between David and Goliath, but it is not like that. "The route to the benefits of Lyft is better because it has a very defined growth strategy. Just step into the center of North America, "reflects Santosh Rao, head of research at Manhattan Venture Partners. "This has helped him avoid the very expensive mistakes made by Uber."
The company in San Francisco has suffered a series of scandals in recent years, including accusations of sexual harassment and the resignation of its co-founder Travis Kalanick. The new CEO, Dara Khosrowshahi, wants to reflect a different behavior. But it has hit death. Last year one of his autonomous vehicles fatally ran over Tempe (Arizona) to Elaine Herzberg while pushing his bike. The investigation revealed that the driver of the Volvo SUV was watching a television program on his mobile phone and did not activate the emergency brakes until after the impact. He soon forgot the accident. Ten months later he has retaken the tests and the Financial Times he ventured the possibility of a spin off of its autonomous car division due to the enormous cost of its development. The fight gathers giants.
It is a market in which it competes with giants such as Waymo (Google), Tesla, General Motors or Apple. "The key for Uber is to achieve autonomous driving with as much brand recognition as possible and in a solid technological position," says Enrique Dans, professor of innovation at IE. The challenge is economic and also a play on words. "There are good situations in Uber and also bad ones, their challenge is to make sure that regulation that seeks to correct bad things does not ruin good ones," says Jonathan Hall, professor of economics at the University of Toronto.
That is why Khosrowshahi has abandoned the less profitable segments. In the case of taxis, its operations in Russia and Southeast Asia, with very strong local competition, have been detached, and it has focused on businesses with growth capacity such as food delivery (Uber Eats), bicycles, rental of mopeds and even flying vehicles. "Uber has not been able to achieve the share it has in the US in international markets," says John Barrios, an economist at the University of Chicago. "This is due to the regulation and competition of regional firms, which are able to imitate their service and know the environment better." The Spanish platform Cabify is an example of that ease of replication.
If finally Uber goes public, injustice will increase. "The company's IPO drives inequality. It will enrich the owners, some privileged workers who have stock options and certain insiders. And you can be sure that none of this will be reflected in better paying drivers! "Exclaims Richard Walker, professor emeritus at the University of California (Berkeley). Only a few will feel the golden rain. The New York Times estimated that 1,000 Google employees became millionaires when it went public, Reuters talks about "hundreds of rich" at the premiere of Facebook and Twitter created 1,600 more. Inequality is a technological earthquake that crosses San Francisco.