Uber will IPO by 2019 and more weekly updates


(Bick Bhangoo) #1

Another week of interesting rideshare news being presented here in brief.

Uber IPO?

While Uber continues to strive for a major injection of capital from Softbank (Japan) offering them a 17% stake in the company, major changes in Uber's management and how it works are being put into place to make Uber a much more attractive company to invest in. Here is a list of corporate changes being made:

  1. Travis Kalanick and other insiders will no longer have supervoting powers; all Uber shareholders will hold an equal vote based on their percentage of holdings in the company.
  2. The board of directors will grow from 11 members to 17.
  3. Uber is committed to placing in IPO by 2019
  4. Until the IPO, the CEO of Uber must have the support of 66% of the board's vote.

These suggestions were agreed upon by Uber’s board of executives, as well as Benchmark, one of Uber’s major and initial investors, will remove the lawsuit from Kalanick when the Softbank deal is signed.

Uber will receive around $1billion from Softbank and Dragoneer which will set Ubers investment value around $69 billion and give these investment companies a 14% to 17% stake in Uber.

Even with all of Uber's losses and crazy roller-coaster media coverage, it is still one of the leading if not leading IPO's to be considered shortly. Uber also states that the IPO will be one of the biggest, and based on all the changes that are occurring after the new CEO's induction into the company, either Uber will reach 2019 in a much better state or it won't reach it at all.

There was only one detractor from the corporate changes, and that obviously came from the "super voters" that lost their voting edge. Shervin Pishevar, a venture capitalist, will sue Uber for loss of shareholding rights that were bought by hard work and a lot of investment. He claims there are over 200 original founding Uber employees represented in this claim.

It seems that everyone is happy but Shervin. Uber gets a quiet boardroom environment and enables new CEO Dara time to work out a corporate saving plan. Softbank and partners become a substantial stakeholder in the company; ex CEO Travis retains his position with a possible come back in the future, just like Steve Jobs has in Apple, and Goldman Sachs will make another hefty fortune by managing Ubers IPO. Let's just hope that all these changes will also turn around a constant $3 billion annual loss and bring Uber closer to a break-even point or can we hope, profit-making?

Softbank, Ola, and Uber

India is split between two ride-sharing companies, Uber and Ola, with each one holding around 50% of the market. Softbank (Japan) is invested in both, so the question that is arising is will there be a merger in India? No matter the outcome, Softbank makes money in any event.

Uber's largest Asian presence is in India after it sold its holdings and operations in China to Didi. The Indian market is worth a cool $15 billion and is growing. Ubers merger deal with Didi brought Uber $3.5 billion which is being used to fund the Indian presence.

Ola is not so far from Uber and raised around 2000 crore from investors including Softbank. Now with all of Uber's changes and with Ola putting up a fight in India, (competition is good) Softbank might try to find a way to merge the two operations to consolidate a win-win situation and monopolize the Indian market.

It doesn't matter which of the two comes out the victor in India, Softbank will just make the merger work to save either one, offering the leadership to the stronger of the two and waylaying any possibility of a major loss in either of the companies.

The Uber Waymo conflict

Its common knowledge today that Waymo, an Alphabet company (Googles driverless research unit) sued Uber for misconduct and breach of contract. Uber and Otto are well known for their unusual business behavior, and being led by a maverick cowboy caused them both a lot of problems.

The main brunt of the accusation is that Uber stole information from Waymo and transferred it OttoMotto. However, Waymo has to prove this, and so far all they have is Anthony Levandowski who pleaded the fifth amendment. Which puts Anthony in the limelight, and doesn't focus it solely on Uber.

It seems that Anthony had taken five Drobo disks of Google propriety information including source codes, laser fields and designer files and more without realizing what was on them. He claims that once he realized what was on them, he went to his legal counsel and informed him of the situation and also claimed that he told Travis who told him to deal with it any way he wanted.

Bottom line, did Uber direct this operation? Was there an operation? Did Anthony work alone for personal gain? Did Anthony know what he had? Can Waymo prove that "Operation Unicorn" existed and that it is what they think it is? (Operation Unicorn is the name that Uber allegedly called this sting.)

Waymo needs to address some questions before it proves that Uber was involved in industrial espionage.

Wymo in the meantime removed all presence from Uber, and transferred their operations to Lyft, investing a hefty $1 billion in their driverless car program.

This is just another lawsuit that new Uber CEO Draa has to deal with, although he has Travis working the case too since he was the CEO when it all happened and that means he has to disprove all accusations to stay clean.


Arianna Huffington describes Uber's new Corporate Culture