On-demand mobility provider Uber is expected to file for its long-awaited IPO next month, according to Reuters. The loss-making company hopes to raise up to $100 billion from listing on the stock market.
In February, Uber reported unadjusted net losses of $865 million on revenues of $3 billion. US competitor Lyft filed for IPO earlier this month, after reporting losses of roughly $1 billion on revenues of $2.2 billion. However, the figures don’t suggest that Uber is burning cash any slower than its rival: Uber would have reported losses of $1.2 billion were it not for a tax benefit.
Both companies plan to reward long-serving drivers with a cash bonus, but in the long run, drivers have little role to play in Uber’s plans.
News of an impending IPO follows revelations earlier this week that Uber is in talks to sell a minority stake in its self-driving vehicles unit, the Advanced Technologies Group (ATG), according to the Wall Street Journal. A group of investors including Japanese car giant Toyota and serial robotics and AI investor SoftBank is said to be considering investing at least $1 billion in the ATG.
Japanese technology and investment behemoth SoftBank is already Uber’s largest external shareholder, with a 15 percent stake since ploughing $7.7 billion into the company last year.
Among its other holdings, SoftBank owns Aldebaran Robotics (now SoftBank Robotics), Boston Dynamics, and Arm, and has significant investments in Sprint, Alibaba, Didi Chuxing, Ola, Grab, and a 19 percent stake in GM’s autonomous driving subsidiary, Cruise. SoftBank’s Vision Fund is the world’s largest technology investment vehicle.
In the US, Uber is locked in a head-to-head race to develop commercial driverless systems with Waymo, General Motors, Apple, Tesla, Ford, and others, and with Cruise to be the first company to bring autonomous taxis to US roads. This makes SoftBank both poacher and gamekeeper, with holdings in both ventures.
In August 2018, Toyota invested $500 million in the ATG in a collaborative deal with Uber designed to bring ‘autonomous mobility as a service’ (AutonoMaaS) to market at scale. Technology from each company will be integrated into purpose-built Toyota vehicles and deployed on Uber’s network, with a pilot scheme planned for 2021.
Accepting further investment in the ATG now would allow Uber to retain operational control as it gears up for IPO. Meanwhile, the enormous cost of developing and commercialising driverless technologies, including sensors, computer vision systems, onboard hardware, and software, would be shared by its partners.
Last year, some investors urged Uber to divest the ATG in advance of IPO, as they believed the quest for driverless systems was causing a haemorrhage of cash that risked killing its core ride-hailing business. Up to 30 percent of sequential quarterly losses have been rooted in the ATG.
However, spinning off or selling the division is not an option, said Uber CEO Dara Khosrowshahi last year. “It’s not something we’re thinking about at this point,” he told Reuters in September, while in August he told the FT that “it makes all the sense for us to have ATG under our roof”.
The road to autonomous transport has not been smooth for the company. A year ago, Uber’s autonomous test cars were pulled from public roads following a fatal collision with a pedestrian in Tempe, Arizona. In the aftermath, it became clear that responsibility for the accident lay both with the vehicle’s onboard sensors and safety systems and the safety driver who was behind the wheel.
In July 2018, Uber announced that it was closing its self-driving trucks division. The decision emphasised Uber’s desire to be an Amazon-style portal for all forms of personal – rather than commercial – transport, from electric scooter hire to bus ticketing, suggested the company.
Uber is also developing autonomous air taxis, which it believes will be a core component of future urban mobility.
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