Here’s What Analysts Are Saying About Uber’s IPO

Uber’s long-awaited initial public offering has analysts mulling over one big unanswered question: Does Uber have a realistic path to profitability?

Uber’s long-awaited initial public offering has analysts mulling over one big unanswered question: Does Uber have a realistic path to profitability?

The ride-hailing company’s public stock listing on Friday comes amid a wave of blockbuster tech IPOs, including one by rival Lyft nearly two months ago.

Uber’s financial details, revealed in the run up to its IPO, confirmed what many had already assumed: It dominates the ride-hailing industry. But whether the company’s shares are a good investment remains uncertain.

Uber said that while it generated $11.3 billion in revenue in 2018, it lost $1.85 billion, excluding the sale of parts of its Southeast Asia and Russia businesses. Meanwhile, its take rate, or the percentage of fares that it keeps rather than gives to drivers, has declined.

Uber has lived through a parade of executive exits before its IPO

… fellow boardmember Arianna Huffington; and Uber founder Travis Kalanick, the face of the company, stepped down amid investor pressure resulting …

Few startups have have gone through more public scandal and boardroom intrigue than Uber. On the road to its breathlessly anticipated IPO, Uber (UBER) has seen its C-suite reshuffled all the way up to the top.

On Thursday, Uber priced its IPO at $45 per share. At that price, the ride-hailing company raised $8.1 billion at a valuation of $82.4 billion.

As most discussion centers around what the shares might do in the first few days, it’s worth looking back and reexamining the Uber executive exodus.

Graphic by David Foster and JP Mangalindan for Yahoo FinanceGraphic by David Foster and JP Mangalindan for Yahoo Finance

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Graphic by David Foster and JP Mangalindan for Yahoo Finance

Accusations of a sexist workplace culture

A large portion of Uber’s high-profile exits since 2017 stemmed from problems related to Uber’s foray into self-driving car technology. That division of Uber, called Uber Advanced Technology, lost three top engineers at the end of 2016 who had all joined Uber from the Carnegie Mellon Robotics Center. The head of the division, Raffi Krikorian, left in February 2017.

Around the same time, a former Uber employee, Susan Fowler, wrote a blog post alleging rampant sexism at Uber and leadership problems. That triggered months of scrutiny and an internal investigation.

SVP of Engineering Amit Singhal resigned in February 2017 after the company discovered that he had failed to disclose a sexual harassment allegation from his time at Google; communications head Rachel Whetstonestepped down in April 2017 amid the fallout from the scandal and how Uber handled it publicly.

Legal disputes over self-driving car tech

Later in 2017, Uber’s self-driving car division became the center of a major legal dispute: Google accused Anthony Levandowski, who worked at Google’s self-driving car division Waymo before leaving to launch self-driving car company Otto, of stealing trade secrets from Waymo and bringing them to Uber. Uber had acquired Otto and made Levandowski the head of Uber Advanced Technologies.

The dispute became a massive headache for Uber, which fired Levandowski in June 2017 and didn’t fully escape the mess until February 2018 when it settled with Waymo for $245 million.

FILE - In this Aug. 18, 2016, file photo, Uber CEO Travis Kalanick, left, and Anthony Levandowski, co-founder of Otto, pose for a photo in the lobby of Uber headquarters, in San Francisco. Former Uber CEO Kalanick returned to a courtroom Wednesday, Feb. 7, 2018, to deal with questions about his discussions with Levandowski, an engineer accused of stealing Google’s self-driving car technology. (AP Photo/Tony Avelar, File)FILE - In this Aug. 18, 2016, file photo, Uber CEO Travis Kalanick, left, and Anthony Levandowski, co-founder of Otto, pose for a photo in the lobby of Uber headquarters, in San Francisco. Former Uber CEO Kalanick returned to a courtroom Wednesday, Feb. 7, 2018, to deal with questions about his discussions with Levandowski, an engineer accused of stealing Google’s self-driving car technology. (AP Photo/Tony Avelar, File)

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In this Aug. 18, 2016, file photo, former Uber CEO Travis Kalanick, left, and Anthony Levandowski, co-founder of Otto, pose for a photo in the lobby of Uber headquarters, in San Francisco.. (AP Photo/Tony Avelar, File)

June 2017 saw a string of additional departures related to Uber’s cultural problems: SVP of business Emil Michael resigned after he was named in a report as part of a group of Uber execs who visited an escort bar in South Korea on a business trip; Uber board member David Bonderman stepped down from the board after leaked audio from a meeting, first reported by Yahoo Finance, showed him making a sexist comment to fellow boardmember Arianna Huffington; and Uber founder Travis Kalanick, the face of the company, stepped down amid investor pressure resulting from both the Waymo fiasco and the reports of sexism inside the company.

In August 2017, Uber brought on former Expedia CEO Dara Khosrowshahi as its new CEO. He has been credited with improving the culture at the company in the run-up to its IPO.

But even after Kalanick left and Khosrowshahi came aboard, the parade of exits continued, as you can see in the Yahoo Finance timeline graphic above. Many of the company’s earliest employees left after Kalanick did, including head of external affairs Dave Clark and chief legal officer Salle Yoo.

Today, the senior leadership team at Uber looks very different from the inner circle at the company just two years ago. And the company still hasn’t fully escaped public criticism and scandal: on the very day before its $90 billion public offering, Uber drivers across the country are on strike over pay.

But many analysts say all that noise is unlikely to dim the shine of the Uber IPO.

Daniel Roberts is a senior writer at Yahoo Finance. Follow him on Twitter @readDanwrite.

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Lyft & Waymo Partnership In Phoenix Means Driverless RIdes Soon

That came after Uber’s former CEO Travis Kalanick began to suspect Waymo was planning to use its self-driving cars in a rival ride-hailing service, …

PHOENIX, AZ — Google’s self-driving venture Waymo is stepping up their game in Phoenix, partnering with Lyft to capture more of the ride-hailing market share.

The alliance between Lyft and Google was announced Tuesday with news about how it will work. By the end of September, anyone with the Lyft app in the Phoenix metro area can tap up one of the 10 self-driving Waymo cars.

Human drivers are still behind the wheel, Waymo executives were quick to point out. By merging with Lyft, there’s hope people will get more comfortable with the technology. Before the partnership, Waymo vehicles have had limited exposure to the public.

It remains unclear when these companies will achieve “level 4 automation” — the point where a human can be truly hands off. While executives have avoided disclosing hard dates, a demonstration without a human was held at a Waymo property in California.

Testing of the self-driving Waymos in Phoenix began in November 2017. In February 2018, Waymo was one of 13 to receive a ride-sharing permit from the state.

Gov. Ducey banned the fleets when a woman was struck and killed by a self-driving Uber car last March. The company was ultimately found not criminally responsible. The incident put a suspension on any self-driving operations for awhile, but Gov. Doug Ducey eventually allowed the startups to proceed.

Meanwhile, Uber and Waymo have been involved in a legal battle over alleged high-tech theft. Waymo accused Uber of orchestrating a scheme to steal some of its autonomous driving technology. That came after Uber’s former CEO Travis Kalanick began to suspect Waymo was planning to use its self-driving cars in a rival ride-hailing service, Arizona Public Media reports.

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Google expands SAP partnership, offering HANA Enterprise Cloud as a managed service

… and highly available Google Cloud infrastructure as well as the latest advances in the areas of big data, analytics and machine learning,” Shah said.

Google LLC is expanding a two-year-old partnership with German enterprise software company SAP SE with a deal to offer SAP’s HANA Enterprise Cloud on its cloud as a fully managed service.

The tech giant is also publishing a series of “market approved journeys” tied to reference architectures to help customers get set up with Sap’s S/4Hana service.

Google began working more closely with SAP in early 2017 when it made some of that company’s most important products, including its HANA data processing engine, available on Google Cloud Platform. The partnership effectively married SAP’s enterprise software to Google’s expertise at scale and infrastructure, enabling companies running SAP HANA workloads to tap into the array of cloud services offered by Google.

The partnership has been a solid success, Google said. “More and more customers are running mission-critical SAP applications on Google Cloud, including ATB Financial, Carrefour and MediaMarktSaturn Retail Group, and we are continuing to see growth with long-time customers including Tory Burch and The Home Depot, who is now running SAP CAR, EWM and BW in production on Google Cloud,” said Snehanshu Shah, managing director for SAP at Google Cloud.

Now, the companies want to build on that success, and one way of doing that is by making it easier for customers to migrate their SAP applications to Google Cloud. To that end, Google is offering what it calls “market journeys” based on reference architectures that define best practices for setting up SAP apps on its infrastructure.

“These solutions will help customers modernize and create experiences using 100% VM-based, highly secure and highly available Google Cloud infrastructure as well as the latest advances in the areas of big data, analytics and machine learning,” Shah said.

Meanwhile, the HANA Enterprise Cloud managed service removes much of the heavy lifting involved with day-to-day operations. “HEC will be offered as a fully managed service on GCP, delivering a flexible operating model to help customers reduce operational complexity,” Shah added.

In addition, Google is offering what it calls SAP C/4HANA extensions on its cloud that allow SAP users to customize and extend their business apps. Google is also throwing in a little sweetener to try and temp new customers to take up SAP on Google Cloud. It’s offering $1,000 in GCP credits for up to 100 SAP C/4HANA customers in order to give them a “jump start,” Shah said.

Image: Google

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Waymo and Lyft Partner for Self-Driving Vehicle Rides in Phoenix

Waymo’s CEO John Krafcik said in a blog post that his company would soon deploy 10 autonomous Waymo vehicles on Lyft’s ridesharing platform in …

Alphabet‘s (NASDAQ:GOOG)(NASDAQ:GOOGL) self-driving vehicle company, Waymo, announced a new partnership Tuesday with ridesharing company Lyft(NASDAQ:LYFT). Waymo’s CEO John Krafcik said in a blog post that his company would soon deploy 10 autonomous Waymo vehicles on Lyft’s ridesharing platform in the Phoenix area.

Waymo launched its commercial ridesharing service in Phoenix just six months ago, and already has roughly 1,000 riders using the service daily to take self-driving trips to work, school, grocery stores, and elsewhere. While the cars drive themselves, Waymo still has a safety driver in each car in case a human needs to take over the vehicle.

Krafcik said in the post that “Once Waymo vehicles are on the platform, Lyft users in the area will have the option to select a Waymo directly from the Lyft app for eligible rides.”

The new partnership is a significant move for both Waymo and Lyft as the autonomous ridesharing market begins to take shape, and each stands to benefit from the new relationship.

Family sitting in a minivan with a Waymo logo

Image source: Waymo.

A win-win for Lyft and Waymo

While the ridesharing market is gaining traction worldwide, the profitability of the model is still in question. The fees Lyft pays to its drivers and the company’s technology, marketing, and other expenses outpace the revenue intake for the company right now. That’s why Lyft and its rival Uber are looking to autonomous vehicles as a way to lower costs in the future.

Instead of creating all of its own self-driving technology, Lyft has opted to partner with other companies that are already making huge strides. For example, Lyft has worked with the self-driving car tech company Aptiv(NYSE:APTV) to provide more than 30,000 autonomous rides to customers in Las Vegas.

The new partnership with Waymo is yet another opportunity for Lyft to introduce its ridesharing customers to autonomous vehicles. It also allows them to gather important data on how riders respond to this type of technology and how well it works. Understanding how customers use autonomous ridesharing vehicles could be critical information for Lyft in the coming years, if the company’s management begins to pivot more in that direction.

For Waymo, the new partnership with Lyft allows the company to expand its autonomous-ridesharing reach in Phoenix. Krafcik said that adding Waymo vehicles to Lyft’s ridesharing network will help his company “welcome even more riders” to experience self-driving technology, and give Waymo “the opportunity to collect valuable feedback” from how riders use the service.

In addition to bringing more riders to Waymo’s service, the partnership will help Waymo show Lyft and other companies just how well its self-driving technology works for ridesharing. Waymo has said that one of the ways it plans to make money from its technology is by licensing it out to other tech companies and automakers. This partnership is just one more way for Waymo to prove its technology is ready for real-world use.

For investors who are still trying to figure out the ridesharing market and how autonomous vehicles fit into it, it would be wise to keep a close eye on this new partnership. Alphabet’s Waymo is one of the leading driverless-car companies in the U.S., and Lyft is the second-largest ridesharing company in the country. What these companies learn from this partnership could potentially influence their businesses for years to come.

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