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How Can Uber’s IPO Losses Affect On Its Future

Effect of Uber’s IPO losses in the future.
Uber is the highest valued tech IPO since FB and Alibaba, and its part of a wave of Silicon Valley ‘Unicorns’ to go public this year. It was accepted that Uber will go public at a whopping $120 billion. It is double the company valuation in 2018. If this would have happened Uber could cross General Motor, Ford, and Fiat.

Uber would have been more valuable than these three combined. But this didn’t happen. Uber said they may offer public shares $44-$50 per share. Uber slipped to the lower end of $45. At this price, the company valued $75.46 billion only. It still makes Uber the most valuable company to go public but it gave a 38% drop that estimated. Uber reported an operating loss of $3billion on revenue of $11.3 Billion in 2018.

 

The effect of this loss is on the employees. The company that has never been profitable, has already started cost-cutting measures in an effort to stem losses. In July, the company laid off 400 employees from its marketing team globally. Khosrowshahi said he doesn’t expect much profit from Uber eats because it has high competition.

Uber earlier used to collect 35% of bookings before paying to the drivers but it has increased to 37%. It’s no surprise that Uber drivers are upset. Recently it was found they only earn $9/hour after accounting for all costs involved. Uber representatives said that As we aim to decrease Driver incentives to improve our financial performance, we expect Driver’s dissatisfaction will generally increase

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