About Uber

Uber is a transportation network company, best known for its on-demand ride-hailing service, where passengers use the Uber mobile app to request rides from nearby drivers. Via the app, a passenger enters their destination and is given a price for their trip – if they accept they will be connected to a nearby driver.

The company was founded as UberCab in 2009 by Garrett Camp, and Uber’s official services and mobile app were launched in 2011 in San Francisco. The company changed its name to Uber that same year. Over the years, the company has expanded into several other services, including food delivery, shipping and a bicycle-sharing system. It is now estimated to have over 90 million users worldwide.

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Uber’s full-year revenue grew 43% year over year to $11.3bn in 2018, according to the company’s self-reported financials. Gross bookings for the year (what the company makes before it pays its drivers) were up to $50bn, an increase of 47% on 2017.

The company itself is emphasising growth over profit, and has invested heavily in other areas including food delivery, logistics, electric bikes and self-driving cars, rather than focusing solely on its ride-hailing services. Uber has reportedly set aside a $1bn budget for further projects this year. In the lead up to its IPO it has promoted itself as a transportation and logistics service, rather than purely as a ride-hailing company.

However, fourth-quarter sales for 2018 didn’t grow as fast as they have done in the past, despite Uber’s many investments. $3bn of the net revenue the company gathered in 2018 (out of $11.3bn in total) was from the last three months of the year. Compared to the previous quarter, this is only up 2%.

While the company has dominated the market since its conception, it has also struggled with public controversies and setbacks. For example, the collision of one of its driverless cars; deceiving regulators; criticism for its company culture; and accusations of spying on its closest competitor, Lyft.

But the biggest challenge for Uber is likely to be its losses, which totalled $1.8bn (adjusted EBITDA loss) for 2018. Losses have slowed (by 15%) compared to 2017, when they were at $2.2bn, but the company will need to prove that it can control costs and make money.

While both Uber and Lyft offer an app-based, ride-hailing service, there are also many differences between the two companies. Lyft was the first of the companies to IPO – it began trading on the Nasdaq on 29 March 2019 with an opening stock price of $87.24. It was valued at more than $24bn when it went public, whereas Uber has a much larger expected valuation of between $80bn and $90bn. Uber is also the larger of the two, operating in over 70 countries, whereas Lyft operates solely in the US and Canada.

Uber CEO, Dara Khosrowshahi, has stated he is not concerned by Lyft’s IPO, believing that there is enough public demand for both companies. This is perhaps reflected in the companies’ business models. While Lyft is focused solely on the thriving US ride-sharing market, Uber is invested in other areas including delivery (Uber Eats) and shipping (Uber Freight).