Uber reveals IPO with warning it may never make a profit

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The non-EBITDA net income, however, is an impressive turnaround compared to its 2017 full-year loss of more than $4 million. Its take rate, or its share of transactions, declined to 10% past year compared to 12% in 2017 due to an increase in restaurants having lower average basket sizes on its platform, an expansion into new regions and increased incentives for drivers, according to the SEC filing.

The company is expected to try to raise roughly $10 billion and seeks a market value of $90 billion to $100 billion, according to the Wall Street Journal. Lyft, Uber's biggest rival, went public on March 29.

The huge filing reveals Uber has been generating the robust earnings growth that attracts investors, but also racked up nearly $8 billion in reductions within its 10 years in life, which mirrors exactly the identical trend challenging Lyft, Uber's primary rival in the U.S.

"Greater competition in markets like India and the United States along with the onboarding of large-volume restaurants at a lower service fee has also resulted in the decline of Uber Eats' take rate to 10 per cent in 2018 from 12 per cent in 2017", the company said. Uber reported a net income of almost $1 billion in 2018, but the loss from operations exceeded $3 billion and the adjusted EBITDA loss was $1.9 billion.

After the closing bell in NY on Thursday, Uber filed an S-1 form with U.S. regulators, setting the stage for a float that could value the company at more than US$100bn. The company also added that operating expenses are to "increase significantly in the foreseeable future" and it "may not achieve profitability", with the filing showing $8 billion in losses since it was started.

Of course, Lyft said the same thing, and still managed to sell millions of shares in its public debut.

Analysts have warned that Uber and Lyft face a hard road to profitability amid challenges from regulators and established taxi operators around the world. "Uber Freight connects carriers with the most appropriate shipments available on our platform, and gives carriers upfront, transparent pricing and the ability to book a shipment with the touch of a button".

Although Uber is not targeting a $120 billion valuation in the IPO any longer, some stock bonuses to CEO Dara Khosrowshahi and other executives of the company are only triggered when that valuation is reached. Drivers can also just keep the cash, too. It has mentioned the New Delhi rape case involving an Uber driver a few years ago.

Uber fears that drivers engaging criminal activities would have a serious impact on their business. It posted revenues of $11.27 million in 2017 according to the filing.

Uber is now in the process of trying to build itself into a one-stop shop for many different modes of transportation, including bikes, scooters, vehicle sharing, and public transportation.

Uber also flagged a risk related to the increasing dissatisfaction among drivers due to reducing incentives and its autonomous vehicle strategy.

Uber had not disclosed the latest user numbers before, and the figure indicates the scale of the business.

Waymo, in its lawsuit, had said one of its former engineers who became chief of Uber's self-driving auto project took with him thousands of confidential documents.

Daniel Ives of Wedbush Securities noted that the ride-hailing firms will face competition from other autonomous driving firms including the former Google auto unit Waymo.

"While we have taken significant steps to rehabilitate our brand and reputation, the successful rehabilitation of our brand will depend largely on maintaining a good reputation, minimizing the number of safety incidents, improving our culture and workplace practices, improving our compliance programs, maintaining a high quality of service and ethical behavior, and continuing our marketing and public relations efforts". The company also rolled out a new redesigned platform that includes a five-point delivery tracker, a feature that other USA competitors don't have. The setbacks have contained uncontrolled sexual harassment and allegations it destroys self-driving vehicle technology. Most recently, Hyundai invested $300 million in Ola.

The blowback from the problems assisted Lyft pickup ground in the USA - a thing Uber acknowledged in its own filing - and contributed to the ouster of both Uber co-founder Travis Kalanick since CEO in 2017.

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