Grab's Nasdaq debut to set tone for Southeast Asian tech listings

SINGAPORE -- Grab, Southeast Asia's biggest ride-hailing and delivery firm, makes its market debut on Thursday after a record $40-billion merger with a special purpose acquisition company (SPAC), in a listing that will set the tone for other regional offerings.

The backdoor listing on Nasdaq marks the high point for the nine-year-old Singapore company that began as a ride-hailing app and now operates across 465 cities in 8 countries, offering food deliveries, payments, insurance and investment products.

Grab's rivals, including regional internet firm Sea and Indonesia's GoTo Group, are also bulking up, with the region's internet economy forecast to double to $360 billion in gross merchandise volume by 2025.

Grab was founded by Anthony Tan, its chief executive, and Tan Hooi Ling, who developed the firm from an idea for a Harvard Business School venture competition in 2011.

CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching as a taxi app in Malaysia in 2012. It later moved its headquarters to Singapore.

"What we have shown to the world is that homegrown tech companies can develop great technology that can compete globally, even when international players are in town ... we can compete and win," Tan told Reuters.

He said Grab's listing would help showcase the opportunity available to investors in Southeast Asia, a region with a population of about 650 million.

Grab's listing brings a payday bonanza to early backers such as SoftBank Group Corp. and Chinese ride-hailing giant Didi Chuxing, which invested as early as 2014.

They were later joined by others, such as Toyota Motor, Microsoft and Japanese bank MUFG. Uber became a Grab shareholder in 2018 after selling its Southeast Asian business to Grab following a five-year battle.

Analysts see scope for many players in Southeast Asia's fragmented food delivery and financial services markets, but the road to profitability can be a long one.

In September, Grab cut its full-year adjusted net sales forecasts, citing renewed uncertainty over pandemic curbs on movement.

Third-quarter revenue fell 9 percent and its adjusted loss before interest, taxes, depreciation, and amortization (EBITDA) widened 66 percent to $212 million. Grab said GMV jumped 32 percent in the quarter to a record $4 billion.

It aims to turn profitable on an EBITDA basis in 2023.

Grab said it completed its business combination with the SPAC, Altimeter Growth Corp. Grab will begin trading on Nasdaq under the ticker symbol "GRAB."

Grab raised $4.5 billion alongside the SPAC transaction, including $750 million from Silicon Valley tech investor Altimeter Capital Management in a deal in April.

-reuters-

Grab to announce merger with US SPAC, to be valued at nearly $40B: sources

SINGAPORE - Southeast Asia's largest ride-hailing and food delivery firm Grab Holdings is set to announce later on Tuesday a merger with US-based Altimeter that is set to value Grab at nearly $40 billion and lead to a public listing, three people told Reuters.

The merger will make it the biggest blank-check company deal ever.

Grab's agreement with a special purpose acquisition company (SPAC) backed by Altimeter Capital includes a $4-billion private investment in public equity (PIPE) from a group of Asian and global investors including Fidelity International and Janus Henderson.

Singapore-based Grab declined to comment. There was no response from Silicon Valley-based Altimeter to an emailed request for comment.

The two fund managers also did not respond to an emailed query.

The sources declined to be identified due to the sensitivity of the matter.

The nearly $40-billion valuation is based on a proforma equity value, two of the sources said.

-reuters-

China's ride-hailing giant Didi readies dividers in cars vs coronavirus

BEIJING -- Didi Chuxing, China's largest ride-hailing services provider, is ramping up efforts in its industry to help stop the spread of the deadly coronavirus, with a nationwide program to install protective dividers between the driver and passenger seats in cars.

Beijing-based Didi plans to invest about 100 million yuan ($14.3 million) in this safety measure, which involves installing protective plastic sheets that are expected to prevent droplet transmission of the COVID-19 disease, according to the company's statement on Wednesday.

"Didi is implementing this and other anti-coronavirus initiatives, as public health officials call on citizens to use public transportation with caution," the company said. "This measure is popular among drivers and riders."


With guidance from medical professionals, Didi initially rolled out its protective divider program in a number of cities, including the southern coastal city of Shenzhen, Taiyuan in northern Shanxi province and in Wuhan, capital of central China's Hubei province and epicenter of the coronavirus outbreak.

Didi drivers can choose to install the protective screens in selected locations or on their own using the instructions provided.

A spokesman for Didi Chuxing declined to comment on the total number of cars under the ride-hailing platform, but said the company supported 30 million drivers as of 2018.

Didi's expanded safety measures have come amid industry difficulties in China, the world's biggest ride-hailing market, where the coronavirus outbreak has led to a slowdown in demand.

Despite aversion to using mass public transport at the present time, even ride-hailing is facing new problems after reports earlier this month of multiple drivers being diagnosed with coronavirus, clouding prospects for an industry already hit hard by government-imposed travel restrictions across the country.

There were more than 74,000 confirmed coronavirus cases and more than 2,000 fatalities across mainland China as of Wednesday morning, according to data released by national and provincial health authorities.

Didi has already set up service stations for sterilizing cars, monitoring the temperature of drivers and distributing free facial masks in more than 148 cities across the country.

Other technology companies have also stepped up their own precautionary measures to help stop the coronavirus from spreading. Food delivery giant Meituan Dianping and Dida Chuxing, a rival of industry leader Didi, have each launched app-based systems that require commuters to provide their personal information by scanning QR codes. The data gathered details where people have been to determine if they have traveled with a person confirmed or suspected to have the coronavirus.

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Uber closing office in downtown Los Angeles

LOS ANGELES - Uber Technologies Inc is closing its office in downtown Los Angeles, where the ride-hailing company employs customer support staff, to focus on its bigger locations.

The move was reported earlier on Tuesday by the LA Times newspaper, which also added that the step will result in the elimination of about 80 jobs.

An Uber spokesman confirmed the closure in an emailed statement.

The jobs from the office being closed will be shifted to a customer support office of Uber in Manila, the LA Times reported, citing sources and a recording of comments from an Uber manager.

Uber did not comment on the job losses mentioned in the report.

Earlier this month, Uber, which is backed by Japanese technology investment giant SoftBank Group Corp, moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020, but added it still expects to lose a total of more than $1 billion this year.

In the fourth quarter of 2019, the company's total revenue rose 37 percent to $4.07 billion on a yearly basis while its net loss widened to $1.1 billion from a loss of $887 million a year earlier.

source: news.abs-cbn.com

Hyundai to make flying cars for Uber air taxis

LAS VEGAS -- Hyundai announced Monday it would mass produce flying cars for Uber's aerial ride-share network set to deploy in 2023.

The South Korean manufacturer said it would produce the four-passenger electric "vertical take-off and landing vehicles" at "automotive scale," without offering details.

The deal announced at the Consumer Electronics Show in Las Vegas could help Uber, which is working with other aircraft manufacturers, to achieve its goal of deploying air taxi service in a handful of cities by 2023.

Jaiwon Shin, head of Hyundai's urban air mobility division, said he expects the large-scale manufacturing to keep costs affordable for the aerial systems.

"We know how to mass produce high quality vehicles," Shin told a news conference at CES.

He said he expected the partnership to allow for the short-range air taxis to be "affordable for everyone."

Eric Allison, head of Uber Elevate, appeared at the CES event with Hyundai to discuss the partnership.

"By taking transportation out of the two dimensional grid on the ground and moving it into the sky, we can offer significant time savings to our riders," Allison said.

He said that because of its other app-based transport options, "only Uber can seamlessly connect riders from cars, trains and even bikes to aircraft."

Uber has announced it had selected Melbourne to join Dallas and Los Angeles in becoming the first cities to offer Uber Air flights, with the goal of beginning demonstrator flights in 2020 and commercial operations in 2023.

Hyundai is using CES to show the S-A1 model aircraft with a cruising speed up to 180 miles (290 km) per hour.

The aircraft utilizes "distributed electric propulsion," designed with multiple rotors that can keep it in the air if one of them fails.

The smaller rotors also help reduce noise, which the companies said is important to cities.

The Hyundai vehicle will be piloted initially but over time will become autonomous, the company said. 

Agence France-Presse

Malaysia threatens ride-hailing firm Grab with $21-million fine

KUALA LUMPUR - Malaysia's competition watchdog on Thursday threatened to hit Grab with a $21-million fine for practices that allegedly reduce competition, the latest problem for the ride-hailing giant.

Grab is the biggest ride-hailing firm in Southeast Asia, and has strengthened its hold on the market since buying US rival Uber's operations in the region last year. 

But the Singapore-headquartered firm has come under scrutiny from regulators in several countries due to concerns about its dominant position. 

The Malaysia Competition Commission proposed fining Grab almost 87 million ringgit ($21 million) for preventing its drivers from providing advertising services for the company's competitors.

This had the effect of "distorting competition" by creating barriers to Grab's rivals, it said.

"It is important that barriers to entry for new players remain low, and for existing players to have the ability to grow and compete on merits to ensure that competition can remain healthy," said Iskandar Ismail, the watchdog's chief executive.

In addition, a daily penalty of 15,000 ringgit will be imposed should Grab fail to take action to address the competition concerns.

Grab has 30 days to respond to the watchdog, after which a final decision will be made.

The company said they had complied fully with competition laws and were "surprised" by the proposed fine.

"We believe that it is common practice for businesses to decide upon the availability and type of third-party advertising on their respective platforms," a Grab statement said.

Last year, Singapore fined Grab and Uber $9.5 million for breaking competition rules when they merged. 

source: news.abs-cbn.com

Uber, Lyft to turn the wheels on car ownership: analysts

TORONTO -- Ride-hailing apps like those of Uber Technologies and Lyft Inc are expected to alter the state of car ownership towards subscription-based services and shared ownership, auto industry experts said at a conference on Wednesday.

At the annual Collision Conference in Toronto, speakers said ride-hailing apps are also set to play a role in testing automation for safety.

"Your phone will be your car," said Andre Haddad, CEO of Turo, a peer-to-peer car-sharing company that enables users to rent their cars out to others.

Haddad said that while car sales have never been higher globally, people are realizing that owning a vehicle is increasingly becoming unaffordable due to car payments, insurance, and parking.

"Many more are realizing they can share their car when they're not using it or rent it out to recover the big costs of ownership," he added.

Uber said it is the largest ride-hailing firm in the world with 91 million users globally and a 65 percent market share in North America.

Both Uber and Lyft went public this year, but are trading well below their offer prices.

Haddad said that car ownership among young adults was on the decline, with fewer adults under the age of 25 purchasing cars.

At the same time, he said the demographics would stabilize and demand for cars for events like weekend trips or vacations would maintain their interest.

Scott Hempy, CEO of Filld, a mobile gas delivery service, said labor trends like working remotely or from home had contributed to the reduced interest in cars, and that ride-sharing would change the insurance industry to per mile charges, rather than a flat fee.

Ride-sharing fleets and taxis are expected to be the testing ground for automation, according to Zaki Fasihuddin, the CEO of Volvo Cars Technology. Fasihuddin said ride-sharing cars would be the first practical applications for autonomous vehicles, at the ultimate goal of reducing all fatalities.

"Give consumers the choice," said Fasihuddin. "Ride-sharing is a viable option. Nowadays people take that for granted, and that's a valid mode of transportation. 

source: news.abs-cbn.com

How the promise of a $120 billion Uber IPO evaporated

Last September, Uber’s top executives were pitched by some of Wall Street’s biggest banks, Morgan Stanley and Goldman Sachs.

The bankers’ presentations calculated Uber’s valuation almost identically, hovering around one particular number: $120 billion.

That was the figure the bankers said they could convince investors Uber was worth when it listed its shares on the stock market, according to three people with knowledge of the talks. Uber’s chief executive, Dara Khosrowshahi, and chief financial officer, Nelson Chai, listened and discussed the presentations, these people said. Then they hired Morgan Stanley as lead underwriter, along with Goldman Sachs and others, to take the company public — and to effectively make the $120 billion valuation a reality.

Nine months later, Uber is worth about half that figure. The ride-hailing firm went public last week at $45 a share and has since dropped to around $43, pegging Uber’s market capitalization at $72 billion — and officially crowning it as the stock market debut that lost more in dollar terms than any other American initial public offering since 1975.

How Uber’s offering turned into what some are now openly calling a “train wreck” began with the $120 billion number that the bankers floated. The figure leaked last year, whipping up a frenzy over how Uber could soon become the biggest American company to list on an American stock exchange — larger even than Facebook, which went public in 2012 at a whopping $104 billion valuation.

But for Khosrowshahi and Chai, the $120 billion number turned Uber’s IPO process into an exercise in managing expectations. Some large investors who already owned Uber shares at cheaper prices pushed back against buying more of the stock at such a lofty number, said people familiar with the matter. Their appetite for Uber was dampened further by the company’s deep losses and slowing growth in regions like Latin America. And Uber had to contend with unforeseen factors, including fraying trade talks with China that spooked the stock market in the same week that the company decided to go public.

The result has created a host of pointed questions for all involved in Uber’s IPO, from Khosrowshahi and Chai to the lead underwriters at Morgan Stanley, Goldman Sachs and Bank of America. While Uber raised $8.1 billion from its offering and reaped billions of dollars in returns for its early investors and founders, what should have been a climactic moment for a transportation colossus instead became an embarrassment.

The extent of the fallout may not be clear for a while, and it is too early to judge how Uber will ultimately fare in the public markets. But as many other tech-related companies aim to go public this year, including the food-delivery company Postmates and the real estate firm WeWork, they will have to contend with whether Uber has squelched what had been a red-hot IPO market.

“The $69 billion market cap Uber had when the market closed today is a new reality,” said Shawn Carolan, partner at Menlo Ventures, which invested early in the company. But he added that Uber’s executives now had “the opportunity to show us what they can do.”

This account of Uber’s IPO was based on interviews with a dozen people involved in or briefed on the process. Many asked to remain anonymous because they were not authorized to speak publicly. Representatives from Uber, Morgan Stanley and Goldman Sachs declined to comment.

For years, Uber was an investor darling. As a privately held company, it gorged on capital from venture capital firms like Benchmark and GV, mutual fund firms like Fidelity Investments, and companies like SoftBank. Its private valuation shot up from $60 million in 2011 to $76 billion by August 2018.

Khosrowshahi, who became CEO in late 2017, was recruited partly to steer Uber through a successful IPO. Uber’s board agreed to pay him $45 million in cash and restricted stock — and set an unusually specific valuation target for an additional bonus. In a provision in Khosrowshahi’s compensation agreement, which was revealed in the company’s IPO prospectus, the board said that if Uber was valued in the public market at $120 billion or more for at least three months in the next five years, he would receive a payout of $80 million to $100 million.

That provision set something of a goal for Uber, which the investment bankers who were hired to take the company public also gravitated toward. Within weeks of the banks’ presentations on the $120 billion, that number leaked, leading to giddy speculation in Silicon Valley and on Wall Street that Uber’s offering could usher in a golden era of wealth.

By December, Uber’s IPO team was set. At the company, Chai, a former CFO at Merrill Lynch, was charged with leading the public offering. At Morgan Stanley, Michael Grimes, the firm’s star tech banker, was the point person, assisted by Kate Claassen, head of internet banking. Goldman Sachs’ team was led by Gregg Lemkau, Kim Posnett and David Ludwig. Bank of America’s was headed by Neil Kell and Ric Spencer.

Almost immediately, the setbacks began, starting with Uber’s business. Its once-meteoric growth rate was slowing as its geographic expansion appeared to be running out of room and as competitors continued springing up across the world.

One growth headache was connected to Uber’s biggest investor, SoftBank. The Japanese company, which has a $100 billion Vision Fund that it uses to invest in all manner of companies, has poured capital into technology startups including Didi Chuxing, China’s biggest ride-hailing company, and 99, a transportation startup in Latin America.

In January 2018, Didi agreed to acquire 99. Both SoftBank and Didi also started directing funds toward pushing deeper into Latin America; SoftBank eventually created a $5 billion fund earmarked specifically for investing in Latin American companies.

For Uber, the timing was terrible. The region was one of its most promising growth areas and its competition had ramped up. By this February, the damage in Latin America had begun showing up in Uber’s results in the form of slowing growth.

Uber’s food delivery business, UberEats, was under attack as well. SoftBank had sunk hundreds of millions of dollars into DoorDash, a food delivery company in the United States. More recently, SoftBank invested $1 billion into Rappi, a food delivery company in Latin America. Uber had to spend more to battle those rivals.

SoftBank and Didi declined to comment. (Uber and Didi own shares in each other as well.)

LUKEWARM DEMAND

The slowing growth led to lukewarm investor demand for Uber’s shares, according to two of the people involved in the matter. Some investors argued that Uber needed to price its offering lower, these people said.

Some investors were also resisting because they had earlier invested in Uber at cheaper prices. Since its founding in 2009, Uber has taken in more than $10 billion from mutual fund firms, private equity investors and others, meaning that its stock was already widely held among those institutions that traditionally buy shares in an IPO. So the IPO essentially became an exercise in getting existing investors to buy more shares — a tough sell, especially at a higher price.

In March, another problem cropped up. Uber’s rival in North America, Lyft, went public and promptly fell below its offering price on its second day of trading. Investors appeared skeptical about whether Lyft could make money, setting a troublesome precedent for Uber.

By the time Uber made its IPO prospectus available in April, it had already told some existing investors that its offering could value it at up to $100 billion — down from the initial $120 billion.

Inside Uber, two people familiar with the deliberations said the company’s board was also not fully briefed on how Khosrowshahi and other executives planned to pitch the firm to investors in what is known as a “roadshow.” Only a smaller group of board members, who were part of a pricing committee — including Khosrowshahi; Ronald Sugar, who is also Uber’s chairman; and David Trujillo of TPG — focused on the IPO, these people said.

Another person close to the board said that all board members were invited to attend pricing discussions and IPO event planning, and that all materials from the pricing committee were made available. Some members were more active than others, the person said.

In late April, Uber proposed a price range of $44 to $50 a share for its offering, putting its valuation at $80 billion to $91 billion, below the $100 billion it had floated just a few weeks earlier.

The company soon hit other obstacles. President Donald Trump tweeted this month that he wanted to raise tariffs on $200 billion of Chinese goods, unsettling global stock markets. The day before Uber priced its IPO, Lyft reported a $1.14 billion loss for its first quarter, renewing questions about the health of ride-hailing businesses.

Uber’s executives, board and bankers discussed the final pricing of the stock sale on May 9. Several board members pushed for a price at the higher end of the $44- to $50-a-share range, said the people briefed on the situation.

But Morgan Stanley, Goldman Sachs and others agreed that it needed to be lower, they said. The list of orders from potential investors, known in Wall Street jargon as the “book,” showed that the most desirable investors — the big asset managers who were most likely to hold on to the shares, even in tough times — were interested only in the lower price.

The final price: $45 a share.

That evening, Khosrowshahi and his management team gathered in New York at Daniel, a Michelin star restaurant a few blocks east of Central Park, at a “pricing dinner” hosted by Morgan Stanley. The mood was upbeat, according to two people familiar with the evening.

But the next morning, that mood had changed. Uber executives arrived at the New York Stock Exchange, where the company was listing its shares. Before the first trade, monitors that lined the exchange floor displayed how Uber’s stock was likely to fall — flashing up $45, $44, before finally opening at $42. The chatter quieted.

The rest of the day was little better. Uber’s stock never rose close to its $45 offering price. As the so-called stabilization agent, charged with helping trading in Uber stock, Morgan Stanley made some moves to support the shares, according to people with knowledge of the matter. But by the end of the day, while the S&P 500 closed up, Uber’s stock remained down.

On Thursday, Uber closed at $43, more than 4% below its offering price.


2019 New York Times News Service

source: news.abs-cbn.com

Uber drivers herald IPO with global strike

A day of strikes planned by Uber drivers in cities around the world drew a modest turnout Wednesday, as protesters denounced the ride-hailing giant’s employment and pay practices before its blockbuster initial public offering this week.

In Britain, some drivers, joined by members of other unions, protested at Uber offices around the country. About two dozen protesters outside the British headquarters in East London banged drums; released a smoke flare; displayed banners that read, “Uber sell off: Billions to bosses, poverty pay for drivers”; and chanted, “Uber, Uber, you can’t hide, we can see your greedy side.”

In San Francisco, hundreds of protesters blocked the street in front of Uber’s headquarters as a brass band played. They carried signs that said Uber and Lyft, its primary rival in the United States, which went public in March, were “launching IPOs on the backs of their drivers.”

And outside Uber’s New York City headquarters in Queens, about 50 drivers and their supporters protested their wages and some of the employment practices of ride-hailing companies, chanting: “Driver power! Union power!” They said they felt they were being treated unfairly by companies that they had helped turn into transportation Goliaths.

“We invest in this company,” said Georges Colois, an Uber driver for more than two years in New York, pointing to the costs of renting or buying a car and paying for its upkeep and fuel, all to the benefit of the ride-hailing companies.

“I believe we deserve some respect and to be paid fairly,” he said.

The strikes were one of the biggest coordinated efforts by drivers to demonstrate their grievances against Uber and Lyft, organizers and drivers said. The protests garnered support from several candidates for the Democratic presidential nomination, including Sens. Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Kamala Harris of California.

But the strikes were largely muted. At La Guardia Airport in New York on Wednesday morning, cars driving for Uber and Lyft picked up passengers, and one airport worker said the flow of for-hire cars was typical for the time of day. Most drivers interviewed said they were either unaware of the strike or unable to participate because they needed to earn money.

At the heart of the drivers’ frustration is their status as independent contractors, not full-time workers. Ride-hailing companies argue that drivers prefer the flexible schedule of a freelancer. But drivers lack full-time benefits like health care and have said they have little control over their wages because the companies set the fares and take a cut of the fees they earn from rides.

In Melbourne, Australia, about 30 protesters gathered near an Uber facility, holding signs that said, “On-demand workers demand a living wage,” and chanting: “Uber, Uber, you must listen. We will break your algorithm!” Their complaints included falling pay, long hours and a lack of sick leave.

The strikes were timed right before Uber’s public offering, with the company set to start trading its shares on the stock market Friday. Uber is the biggest of a generation of technology startups that base their businesses on smartphones and use gig workers. The company is expected to be valued at more than $80 billion in its IPO, and its founders and investors are set to reap billions of dollars in wealth.

But that windfall will largely skip the drivers. Although Uber has said it intends to award cash bonuses to more than 1.1 million drivers — with those in the United States having the option to buy the company’s stock in the IPO — drivers have called that a fig leaf. They said the wealth being gained by top executives and private investors had prompted the action Wednesday.

Mostafa Maklad, a driver in San Francisco who worked with the group Gig Workers Rising to help organize the protest, said he had received an IPO bonus of about $500 from Uber after driving for four years.

“They are just throwing us crumbs from how much money they will make,” he said.

Annette Rivero, who drives for Uber and Lyft in San Francisco, said she had recently struggled to keep up with her rent and bills as the ride-hailing companies cut back on incentive bonuses.

“I’m out until 4 a.m. trying to make money to pay my phone bill the next day,” she said.

In Chicago, a group of drivers called Chicago Rideshare Advocates has put forth a legislative wish list that includes pay-rate increases, a cap on the number of ride-hailing vehicles in the city and an independent way for drivers to appeal suspensions or banishment, known as deactivation.

Eli Solomon Martin, a founder of the group, said seemingly arbitrary deactivations were among the most frustrating aspects of work as a driver.

“If you haven’t had an unfair deactivation, you know someone who has,” Martin said.

More than 3 million people drive for Uber globally and have earned $78.2 billion from the service since 2015, the company said in a recent regulatory filing. In a statement Tuesday, Uber said, “Drivers are at the heart of our service ─ we can’t succeed without them ─ and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road.”

Lyft said in a statement, also Tuesday, that driver earnings had increased over the last two years.

“We know that access to flexible, extra income makes a big difference for millions of people, and we’re constantly working to improve how we can best serve our driver community,” a spokesman said.


2019 New York Times News Service

source: news.abs-cbn.com

Lyft sees 'peak losses' this year, says ride-hailing has path to profit

SAN FRANCISCO/BENGALURU -- Ride services company Lyft Inc forecast that its losses would peak this year as it controlled expenses and got more revenue from each customer, posting a $1.1 billion quarterly loss on Tuesday, days ahead of rival Uber's IPO.

"We are encouraged by our strength of our core business and see a clear path to profitability in ride sharing," said Chief Financial Officer Brian Roberts, sparking a short-lived bump in shares.

Lyft promised profit in ride-hailing services without giving any timeline, but it previously had warned regulators it may never make money overall as it invests heavily in self-driving cars, renting scooters and other ventures.

As ferocious growth slows at Lyft and Uber Technologies Inc , investors are paying more attention to what the companies need to do to make a profit.

Investors appeared uncertain how to interpret the company's performance, with shares moving up and down after the bell. Since Lyft's IPO on March 29, shares had fallen 23 percent.

The report, Lyft's first as a public company, showed revenue nearly doubled for the quarter ended in March but forecast that growth would slow to 52 percent to 53 percent for the full year. Lyft is watched as a bellwether for Uber, which will price its offering on Thursday.

Lyft said it was getting more revenue per customer, reducing incentives and boosting margins, although investments in areas such as self-driving, scooters and bikes were masking improvements in its core business.

New technology to match drivers and riders, and higher-priced rides in luxury vehicles were helping boost margins, it said. Lyft said its adjusted EBITDA margin improved to negative 28 percent from negative 60 percent a year ago.

The company, which says it has nearly 40 percent of the US ride-hailing market, said increased demand helped push revenue to $776 million in the quarter, above analysts' average estimate of $739.4 million, according to IBES data from Refinitiv.

A second-quarter revenue forecast of $800 million to $810 million was ahead of analysts' expectations of $783.1 million. The low end would amount to a revenue increase of 58 percent, however, far short of the growth Lyft has enjoyed recently.

Last year's second-quarter revenue got a boost from a price hike, making this year's comparison more challenging, Lyft said.

Atlantic Equities analyst James Cordwell called the results "pretty strong," with hints that Lyft was continuing to take market share from Uber. He cautioned, however, that Lyft's outlook did suggest "a meaningful slowdown in revenue."

"The question will be whether this is just conservatism, Uber starting to fight back, or the company hitting tougher comps," Cordwell added.

In a snub to Uber, Lyft also announced a partnership with Alphabet Inc's Waymo in which Lyft will deploy 10 self-driving vehicles around the Arizona city of Phoenix by the third quarter. Uber has welcomed Waymo cars on its network but has not signed any deals.

For its second quarter, Lyft forecast an expected adjusted EBITDA loss of $270 million to $280 million.

Lyft posted revenue of $37.86 from each of its 20.5 million active riders during the first quarter, a 34 percent increase in revenue and a 46 percent increase in riders over the same period in 2018.

A net loss widened to $1.14 billion, or $48.53 per share, in the first quarter ended March 31 from $234.3 million, or $11.69 per share, a year earlier. Stock-based compensation and payroll tax made up $894 million of that amount.

Last year, Lyft had 30.7 million riders and 1.9 million drivers in more than 300 cities in the United States and Canada. In comparison, Uber - which could be valued at about $90 billion - had 75 million riders and 3.9 million drivers in 65 countries.

source: news.abs-cbn.com

Uber said to plan IPO price range valuing company as high as $90 billion

SAN FRANCISCO — Uber plans to set a price range for its initial public offering that would value it at as much as $90 billion, a person with knowledge of the situation said Thursday, in a sign of caution amid a flood of highly hyped tech offerings.

The world’s largest ride-hailing company, Uber plans to offer its shares to investors for $44 to $50 each, putting its total valuation between $80 billion and $90 billion, said this person, who was not authorized to speak publicly.

In that range, Uber would fall short of the $100 billion valuation that it would have reached based on earlier pricing it shared with some investors, though it would still be above the $76 billion it was appraised at in its most recent private fundraising in August.

Lyft, Uber’s chief rival in the ride-hailing industry, got off to a turbulent start in public markets. In the weeks since Lyft’s shares began trading, they have skidded below their offering price, making it more of a challenge for Uber to pitch itself to investors.

Lyft was the first ride-hailing business to go public, and stock investors are closely watching its progress to determine how to value the business model. Both companies are growing rapidly, but neither is profitable. Lyft increased its IPO price after meetings with investors suggested there was a strong appetite for the stock, but since the stock began trading Lyft’s valuation has dropped from $24 billion to $16.1 billion.

The rocky start created pressure for Uber to be conservative in its pricing, and avoid “breaking” — or falling below — its IPO price, said Kathleen Smith, a principal at Renaissance Capital, which provides institutional research and IPO exchange-traded funds.

“Lyft acts as a very important valuation bench mark for Uber,” she said. “Uber cannot break its IPO price. The best way to avoid breaking your IPO price is to be conservative when you start out with your valuation.”

Lyft and Uber are among a collection of tech companies headed to the public markets this year. Pinterest and the videoconferencing company Zoom have made their debuts. Food delivery service Postmates, workplace messaging app Slack and home fitness company Peloton are set to follow.

Uber’s potential valuation, which it will finalize when it sets the price for its shares the day before it begins trading next month, nonetheless crowns the company as the most valuable of its generation of tech startups.

Many of these companies upended traditional industries like transportation and real estate through mobile apps and a marketplace-based business model that relies on independent contractors.

Over the past decade, Uber, which lets people hail rides through an app and uses freelance drivers, has disrupted the taxi industry and thoroughly changed many people’s travel behavior.

But it is a long way from proving its disruptive business is also a profitable one.

In a recent regulatory filing, Uber said it lost $1.8 billion in 2018 on revenue of $11.3 billion. It also noted that, although the company’s business is still expanding, that growth had slowed. Unlike Lyft, Uber has also begun secondary businesses providing freight shipment and food delivery, which the company said were growing more quickly than its core ride-hailing business.

One of Uber’s most significant costs is the money it spends to create self-driving cars — a long-term project the company hopes can help it pare the money is has to pay its drivers.

It spent $457 million on its development of autonomous vehicles during 2018, but industry watchers believes its program has fallen behind bigger rivals like Waymo, which is owned by Google’s parent company, Alphabet.

Uber recently received $1 billion in new funding for the effort from SoftBank and Toyota. The investors valued Uber’s self-driving unit at $7.25 billion.

Uber plans to begin meeting investors in an official roadshow next week, and its underwriters, led by Morgan Stanley and Goldman Sachs, could raise the offering price of its shares if they determine that prospective investors are interested enough. In a letter Uber issued to holders of its convertible bonds this month, the company floated a price range of $48 to $55 for its shares.

Since Lyft’s IPO, other companies have been rewarded for playing it safe as they first approached investors. Pinterest, the digital pin board company that went public this month, initially offered its shares to investors at below its last valuation in the private market. By the time of its debut, however, the price range had been raised above that previous valuation.

Uber’s planned price range was reported earlier by Bloomberg.

Even at a $90 billion valuation, Uber would be the third-largest company to enter the United States’ public markets in the last 10 years, topped only by Facebook’s 2012 debut at $104 billion and Alibaba’s IPO in 2014, which valued the e-commerce giant at $167 billion.

Lise Buyer, founder of the Class V Group, an IPO advisory firm, said the lower pricing was a sign that investors were valuing each company on its individual merits, rather than on broader market trends.

“While they will seemingly pay any price for some, more often they will evaluate each company separately,” she said. She added that a once-reported $120 billion price tag for Uber was never set in stone. “No one really knows what price will be on the cover until it’s in black and white,” she said.

c. 2019 New York Times News Service

source: news.abs-cbn.com

Uber, Airbnb take sharing economy to mainstream with stock listings

WASHINGTON -- The "sharing economy" is becoming mainstream with the anticipated stock listings from services such as Uber, Lyft and Airbnb, signs that the trend is gaining momentum and impacting multiple sectors.

These multibillion-dollar online platforms have already been a disruptive force in many economic segment, and analysts say the public listings may be a watershed moment, likely to fuel even more changes.

The growth in these on-demand services is eroding sentiment for ownership of homes, cars and other goods, and is also shifting the concept of labor and employment, sparking fierce debates on whether the change is good or bad.

Lyft, the large US ride-hailing service and Uber rival, became the first to announce its initial public offering, seeking to expand a firm valued privately at more than $15 billion.

There has already been an explosion of startups for sharing cars, bikes, scooters, housing and more services. The office rental sector is being transformed by co-working spaces like WeWork, now valued at some $45 billion.

"This is just the beginning for the sharing economy," said Arun Sundararajan, a New York University professor who follows the sector.

"I think we'll see large platforms for professional services for certain kinds of health care, and perhaps for alternative energy," he said.

Spending for "on demand" on services such as Uber and Airbnb and other digital platforms rose 58 percent in 2017 to $75.7 billion in the US, with more than 41 million consumers participating, according to a survey by Rockbridge Associates.

Rockbridge founder Charles Colby cautions, however, that the sizzling growth may cool.

"I don't see these firms as the next Amazon or Apple, because they are carving out narrow marketplaces and will start experiencing competition from traditional providers, some of which are quite savvy," he said.

Sharing economy firms have also sparked their share of controversy. Uber and Lyft have faced protests and challenges from traditional taxi operators and some regulators have banned or limited ridesharing. Airbnb has also been curtailed in some markets amid complaints over disruptions in the real estate markets and the hotel sector.

PRIVATE CARS VANISHING?

In transportation, some analysts argue the sharing trend is moving at a breakneck pace that will radically change urban landscapes, in line with the vision of firms such as Uber and Lyft to sharply reduce the need for private vehicles.

Tech research firm RethinkX predicts that the number of cars in the United States will drop by more than 80 percent by 2020 and 95 percent of travel will be using on-demand autonomous electric vehicles.

By gaining access to capital on Wall Street, sharing economy firms may be able to grow even bigger and flex their power more in disrupting traditional kinds of services.

The IPOs suggest that the sharing economy "is ready for prime time," said Saif Benjaafar, director of the University of Minneota's Initiative on the Sharing Economy. 

"Lyft and Uber have demonstrated the operational viability of the business model: the ability to execute at scale and in different markets. What remains to be seen is to what extent these operational capabilities can now be leveraged to achieve financial profitability."

Benjaafar noted that Uber and Lyft have piled up huge losses while Airbnb has been profitable, they revolve around the same concept.

These firms "demonstrated the viability of businesses built around the concept of trust among strangers," Benjaafar told AFP.

"They also showed... how rapid growth can be achieved by being asset-light, and instead tapping into existing assets with excess capacity, and relying on an independent and contingent workforce."

WORKER ANGST

That feature -- the contingent workforce -- is one of the main targets of criticism of the online platforms.

These services upend the notion of traditional employment: backers say this leads to more flexible work arrangements and entrepreneurship, while critics argue it destroys the benefits and security available in most conventional jobs.

A 2018 study by the UCLA Institute for Research on Labor and Employment found that most ride-hailing drivers worked full time and supported their families from that income.

The study also found 44 percent had difficulty paying for work or vehicles expenses, and that most wanted an organization to demand improvements in wages and working conditions.

While many see advantages in the flexible work, on-demand drivers must find other ways to get needed benefits such as health and unemployment insurance.

Sundararajan said one of the main challenges for the sharing economy will be what happens to the "social safety net" which includes benefits such as health insurance, sick leave and retirement.

He said the current social contract established in the 20th century revolves around traditional employment.

"In 20 years when we look back at this, if we can do a good job of refashioning our social safety net to be tailored for this new economy, that is going to be central to whether we see this transition as good or bad," Sundararajan said.

source: news.abs-cbn.com