2019 is the year of the IPO for many popular companies, including Uber, Lyft, Airbnb and more. But how will recent market volatility impact these companies’ plans? Senior RSG contributor John Ince covers that concern, plus how people are shifting from expensive ambulances to rideshare, and riders’ reactions to getting picked up in a Tesla Model 3.
These companies are planning gigantic IPOs. The market might stop them [CNN]
Sum and Substance: Anxiety on Wall Street may not bode well for high-profile private companies that hope to go public this year. Uber and Lyft have confidentially filed initial public offering documents with the Securities and Exchange Commission, which means more details about their financials should be available for investors within the coming months.
The two could debut on Wall Street by late spring or early summer. Their IPOs would be gigantic: Uber was last valued at $72 billion, while Lyft was recently valued at $15 billion. Airbnb, WeWork and Pinterest, which are all valued at $10 billion at least, are also rumored to be considering an IPO this year.
With a growing number of economists predicting at least a minor recession by 2020, it may make sense for these companies to go public now before a downturn in the broader markets makes those plans untenable. But a volatile stock market could still scare some of them away from launching an IPO. The problems plaguing Facebook and some other tech darlings might also serve as a cautionary tale…
My Take: Investors beware. Yes, Uber is getting a lot more favorable publicity these days and most analysts praise the new CEO, but the underlying fundamentals of this business warrant much closer scrutiny. Uber has now had over 10 years to demonstrate that its business model works – and has failed miserably. They’ve only had one profitable quarter in that span, and that came on the strength of an asset sale and some accounting gymnastics.
The magnitude of the losses – $1 billion a quarter – is staggering. When analysts start digging deeper into the numbers, they’re going to see microeconomics that just don’t make sense – subsidizing drivers with bonuses and passengers with discounts – just to spur growth. That can only last as long as investors continue to subsidize growth.
Hence, the IPO. Of course, the existing investors don’t care about long term profitability so long as they can cash out at some attractive multiple of what they paid for their equity. That, after all, is the game they play in Silicon Valley.
Uber employees’ feelings about the company revealed in leaked worker survey [USA Today]
Sum and Substance: Uber employees are feeling better about their employer and their own work, according to a new leaked employee survey. The poll is conducted every six months and this latest one is from October, according to Business Insider, who first reported on the leaked answers to 35 questions the workers answered.
The results are favorable/positive, neutral or negative and the responses are compared to those from the previous employee survey.
For example, of the 18,648 Uber employees who participated in the poll, here’s the percentage that answered the following questions favorably, according to Business Insider:
I believe that Uber is in a position to succeed over the next two years — 83 percent
I feel heard by my manager — 73 percent
I feel secure about my job — 66 percent
I feel fairly treated — 63 percent
Uber acts in a socially responsible way — 63 percent…
But some questions posed to employees garnered fewer positive responses than they did last time, Business Insider reported.
… The company behind the popular ride-hailing app has previously come under fire from employees who feel they aren’t paid well enough. Also casting a shadow were allegations that Uber was a toxic work environment for women and that some of its aggressive business tactics may have been illegal. Amid that, co-founder and CEO Travis Kalanick resigned in June 2017.
My Take: With this survey, we now have pretty clear evidence of a turnaround under new CEO, Dara Khosrowshahi, at Uber headquarters – at least in terms of employee morale. The timing is great with the IPO looming on the horizon. When employees feel good about the company they work for, they’re much more productive. When they’re more productive, they’re more effective. Now if we could just get driver morale up too, we’d have really accomplished something.
Uber vs. Ambulance [FourStatesHomePage]
Sum and Substance: Some are using a different transportation option when they head to the emergency room. Ambulance costs can run you hundreds or even thousands of dollars depending on your insurance.
Due to its low price, some are ditching the ambulance bill and hitching a ride to the ER in an Uber. And the odd trend is something paramedics are saying could be dangerous…
“I’m sure cost has something to do with it. Ambulances are expensive. For sure,” says Matt Watt, Paramedic Battalion Chief for METS.
Price wise, using an Uber can be the better option. And one local Uber driver says he’s seen this trend firsthand.
“I know she was pregnant and she had a suitcase. And I thought she was going, flying somewhere out of Joplin. Turns out she was going to the hospital, her water broke. And she was in labor. So I drove her to Mercy,” says Mike Woodruff.
But Uber drivers aren’t always equipped with medical knowledge. Paramedics say the better and safer option to get to the hospital is always an ambulance.
My Take: I’ve had several trips to the hospital under urgent circumstance and it’s alway worked out fine. But I can also imagine circumstances when it wouldn’t… and I wonder what kinds of liability might apply.
Certainly the price differential incentivizes passengers to take an Uber over an ambulance, but at what cost? What if a life was endangered? What if a life was lost? These are matters I choose not to contemplate.
Have you had experiences that put you in a scary situation? Please share.
Uber driver says he was shot while picking up woman [News5Cleveland]
Sum and Substance: Cleveland police are investigating the shooting of an Uber driver.
Police said they received a call Sunday from a man who was shot in Cleveland but drove to his home in Parma before calling authorities…. When officers arrived, they found a man who said he was an Uber driver who had just moved to Ohio from North Carolina.
While still parked, he said a grey or tan four-door sedan drove by and one of the occupants began shooting. One of the bullets shattered the victim’s driver-side front window and struck his left shoulder. He drove off to get away from the gunfire, and after making a few turns the passenger jumped out of the vehicle…
My Take: Typically, here at The Rideshare Guy, we don’t like to dwell on the sensationalist stories that frequently appear in the press about being an Uber driver… and there certainly are a lot of them. Almost every week, I pass over stories about shootings, sexual assault allegations and all manner of scary stuff. But every now and then I like to feature stories like this, just as a reminder that this gig does carry risks.
I scan the news regularly, and I can’t recall ever seeing an article about Uber or Lyft releasing any data about assaults on drivers. I’d be interested to see that data, because one gets the impression from reading the news that they’re not all that unusual. What stories do you have that you’d like to share?
Picking Up Uber Riders in a Tesla Model 3! [YouTube]
Sum and Substance: YouTuber Andy Slye picks up riders in his Tesla Model 3, and these are their reactions to the ‘Easter eggs’ found in the Tesla, the moon roof, and more Model 3 features.
Editor’s Note: Talk about a dash camera set up on Andy’s Tesla Model 3! These (very nice) Uber passengers’ reactions to being picked up in a Tesla Model 3 are pretty great – some are awed, some are impressed, and some still seem to be more interested in their phones than the car itself. What would be your reaction if you were picked up in a Tesla Model 3?
Readers, what do you think of this week’s round up?
-John @ RSG
