Uber to go public at $47 a share for $86B valuation

Dive Brief:

Ride-hailing giant Uber will go public Friday with an expected price of $47 a share, according to The New York Times and others. The company will be listed on the New York Stock Exchange (NYSE) under the ticker UBER.
With that share price, the company has an overall valuation of around $86 billion, which is below the $100 billion it forecast to investors.
Uber's listing on the public markets follows rival Lyft's entry onto Nasdaq in late March.

Dive Insight:

Uber's entry onto the NYSE at the start of Friday trading caps a tumultuous period for the ride-hailing industry, which had been filled with optimism as both companies filed initial public offerings (IPOs), but have hit choppy waters. Lyft started trading at $72 a share before experiencing significant downward movement in its share price, and as of market close Wednesday was around $52 a share.

Analysts have raised concerns about the losses that both ride-hailing companies have suffered, and that continued with Lyft’s first earnings report earlier this week, which showed it suffered Q1 losses of $1.14 billion, even as its revenue rose from $397.2 million in Q1 of 2018 to $776 million in Q1 2019.

Those net losses included $894 million in stock-based compensation, but the company anticipates a healthier Q2 with total revenue around $800 million and losses of up to $280 million. Lyft co-founder Logan Green said in a statement that Q1 was a "strong start to an important year," and that transportation is "in the very early stages of an enormous secular shift from personal car ownership to Transportation-as-a-Service."

Also putting pressure on the ride-hailing companies are driver advocacy groups, which are calling for higher wages and took action Wednesday with protests and rallies in several large U.S. cities. In New York, groups including the Independent Drivers Guild (IDG) held a 300-person rally outside both companies' offices and led a protest procession across the Brooklyn Bridge that organizers said snarled traffic.

"Drivers built Uber and Lyft and it is wrong that so many drivers continue to be paid less than minimum wage while Silicon Valley investors gets rich off their labor," Brendan Sexton, executive director of the Independent Drivers Guild, said in a statement. "All Uber and Lyft drivers deserve fair pay and we stand in solidarity with our sisters and brothers across the nation and around the world."

With public pressure being applied, as well as an apparent lowering of expectations on Wall Street after Lyft's rocky start to trading, it's important for Uber to get off on the right foot and show that ride-hailing companies have a solid future as publicly-traded entities.