Uber’s IPO : This Unicorn Story a Myth

The most anticipated IPO in many years is set for this month, but is the Uber unicorn a real fairy tale.  The price for the UBER ticker symbol is set between $44 to $50 for its public debut on May 10^th.

1. Lyft IPO should be a warning.

Lyft, the rideshare company and Ubers main competitor in the US went public and  Lyft stock slid 20% in a matter of days. Lyft is by all accounts a stronger, faster growing company than Uber.

2. Uber has slow growth

Uber’s profitability, slowing growth and limited financial disclosures are just a few reasons why this once Mammoth company is now not getting the investor love it once had. Silicon Valley has seen enough Snapchats to know when it’s time to hang up your hat on over-valued stock.

3. Uber Drivers will leave in masses after IPO

Uber will start to limit incentives for drivers as soon as it goes public to help boost profits. As many of their contracted drivers see perks go down they will switch to driving with the more contractor friendly Lyft. Uber has evaded treating drivers as employees, which leaves their drivers free to drop the company and switch to Lyft.

Uber will find it will be difficult to keep many new drivers when more share of their earnings with less benefits will be handed to the parent company who treats drivers like the  black sheep of the family instead of bread winners.

Uber’s attempt to squeeze drivers in 2017, along with a series of PR disasters that led to the #DeleteUber campaign, drove both riders and drivers to other platforms, like Lyft. According to data firm Second Measure, Uber’s share of the U.S. rideshare market declined from 82% at the beginning of 2017 to 71% at the end of the year.

4. Uber Legal Troubles

Uber was a thorn in the side for regulators in many countries and has a history of less than honorable behavior. The company had its fair share of negative press, and has snubbed its nose at many regulators for years. Uber has been banned in cities and states throughout the US, Europe and Asia. Uber is landmine and even with an IPO, the company will have an uphill battle to fix its legal and regulatory issues in many countries.

Companies like Bolt in Europe have shown that it’s possible to operate a ridesharing app profitably, but you can’t do so while simultaneously trying to achieve a dominant market share worldwide. Uber can be a huge company, or it can be a profitable company, but it can’t be both.

5. Ubers numbers don’t add up

Uber believes that it is unstoppable and their claim that they will  control 15% of the global economy is at best insane. The company prospectus looks more like a pennystock pump and dump than a serious reflection of the companys true potential and current economic situation.

6. Uber regime changes

Many of the original members of Uber have moved on or been thrown out. The CEO and Founder Travis Kalanick along with CFO and the team that heralded Ubers initial success have all moved on or been kicked out, leaving seasoned Silicon Veterans to hold the store.