San Francisco, Apr 12 (AP/UNB) — Uber is providing a look under the hood of its business in the lead-up to its hotly anticipated debut on the stock market, revealing strong growth but an ongoing struggle to overcome huge losses and repair its reputation.
Documents released Thursday offered the most detailed view of the world's largest ride-hailing service since its inception a decade ago.
The massive filing shows Uber has been generating the robust revenue growth that entices investors, but also racked up nearly $8 billion in losses over its 10 years in existence, which mirrors the same trend challenging Lyft, Uber's main rival in the U.S.
Uber's revenue totaled $11.3 billion in 2018, a 42% increase from $7.9 billion in 2017, and a giant leap from $495 million in 2014.
The company posted a profit of $997 million last year, but that doesn't mean its ride-hailing service suddenly started to make money — far from it. The positive result stemmed from a windfall that Uber generated from the sale of its operations in Russia and Southeast Asia. The company said it sustained an operating loss of $3 billion.
The San Francisco company also disclosed a legal cloud hanging over its head as government authorities and regulators investigate whether the company broke any laws.
Among other things, Uber revealed the U.S. Justice Department is conducting a criminal investigation into a yearlong cover-up of a massive computer break-in during 2016 that heisted personal information belonging to millions of passengers and drivers.
The probes are among the many risks that investors must weigh as they mull whether to jump into one of the biggest IPOs in years.
Uber CEO Dara Khosrowshahi acknowledged the self-inflicted wounds that damaged the ride-hailing service's reputation while trying to make the case that the company has rehabilitated itself since he took over 18 months ago.
He struck his note of contrition and optimism in a letter included in the federal documents.
"Some of the attributes that made Uber a wildly successful startup — a fierce sense of entrepreneurialism, our willingness to take risks that others might not, and that famous Uber hustle — led to missteps along the way," Khosrowshahi wrote, closing his letter by assuring he will run Uber with integrity.
Reaching profitability has proven to be a challenge for both Uber and Lyft. Paying drivers is a huge expense, and Uber's fierce competition with Lyft for customers has led both companies to offer rides below cost. Drivers for both companies complain about declining earnings, and they can easily switch between platforms, making it difficult for either company to further reduce driver costs and keep fares cheap for passengers.
Uber said it plans to give bonuses to qualified drivers and is setting aside an undisclosed portion of its stock for drivers to buy.
Its unprofitable history may force Uber to eventually raise its ride-hailing prices unless it can reduce its costs by shifting to driverless cars or expand into other markets and lines of business.
But Uber's operating losses declined from $4 billion in 2017 to $3 billion in 2018, indicating it could be heading in the right direction.
"They're showing that they're capable of controlling their costs, which has been a concern of ride sharing companies in general," said SharesPost analyst Alejandro Ortiz. "That's a sign that will be looked on favorably in the next few weeks."
Lyft beat Uber to the stock market last month with an IPO that raised $2.3 billion, but its shares have been backsliding after an early run-up. Lyft's stock currently is hovering around $61, down from its IPO price of $72.
The rocky start may have prompted Uber to tamp down its IPO ambitions. 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. That's below earlier estimates of $120 billion.
The investment bankers handling Uber's IPO are expected to reveal a pricing range for Uber's shares later this month. That will come before executives head out on a so-called road show designed to drum up interest in the IPO among institutional investors who will be given the first opportunity to buy the stock before it begins trading on the New York Stock Exchange next month.
In the end, Uber is widely expected to be the biggest technology IPO since Chinese e-commerce giant Alibaba Group went public in 2014. And it's likely to be the largest among U.S. tech companies since Facebook took its bow on Wall Street seven years ago at a time when most people hadn't ever considered using an app on their smartphone to summon a ride from strangers driving their own cars.
Uber launched in 2009 as UberCab, a black car service where customers could hail professional drivers with a few taps on a smartphone. It shortened its name to Uber in 2010, distancing itself from the taxicab industry, which has criticized the company for operating under less regulation than the traditional taxi industry.
The company operates in 65 countries and has completed 10 billion trips worldwide.
Uber is also expanding in other markets such as freight while offering other ways to get around with shared scooters and bikes. Its fast-growing food delivery business, which spans 500 cities globally, doubled its revenue to $757 million in 2018 from $367 million in 2017.
But Uber faces challenges that Lyft doesn't because of a series of damaging revelations that sullied its reputation among consumers. The setbacks have included rampant internal sexual harassment and allegations it stole self-driving car technology.
The blowback from the problems helped Lyft pick up ground in the U.S. — something Uber acknowledged in its filing — and led to the ouster of Uber co-founder Travis Kalanick as CEO in 2017. Now it will be up to Kalanick's successor, Khosrowshahi, to persuade investors that Uber has cleaned up its act and merits a market value higher than Ford Motor and General Motors combined.
Kalanick is one of Uber's largest shareholders, owning nearly 9% of the company's stock.
Uber has been investing substantially in self-driving vehicles, which could be critical to reducing driver costs and achieving profitability. It launched its first self-driving test vehicle in 2016 and its self-driving car division has more than 1,000 employees, and it has built more than 250 self-driving cars so far.
But it suspended testing when one of its self-driving vehicles struck and killed a pedestrian in Arizona last year. The company resumed testing self-driving vehicles in Pittsburgh in December.
In its federal filing, Uber warned of the fierce competition it faces on that front from rivals such as Tesla and Google's Waymo, who it said could introduce autonomous vehicles earlier than Uber. The company also warned that potential future regulations or increases in insurance costs could impact the autonomous vehicle business.
Alphabet, the parent company of Google, owns 5% of Uber, even as it competes with Uber on self-driving technology. Alphabet also owns roughly 5% of Lyft's stock.
Dhaka, Apr 11 (UNB)- A section of industrialists on Thursday urged the government not to hike gas and electricity prices.
The call came from a seminar titled ‘Energy Pricing: Impact on Industries,’ organized by the Dhaka Chamber of Commerce and Industries (DCCI) at its auditorium in the capital’s commercial district.
Businessmen participating in the seminar pointed to various problems with the gas connection they get in their factories. They held the view that the faults should be corrected to provide a reliable gas supply, before the government goes for rate hikes.
Muhammad Fouzul Kabir Khan, former secretary to the Power Division, presented the keynote. He explained that the proposed hike in the price of gas would not have the same blanket effect across all industries. Rather it would vary from one industry to the other, depending on the predominance or otherwise of gas as an input in the production process.
So for a gas-fired power plant, the cost of power production may increase 93.7 percent; for steel mills, production costs may shoot up sharply, by 7.4 percent; and cost of cement production may increase by nearly 2 percent.
“Non-food inflation may also increase to 1.5percent due to gas price hike. Electricity tariffs in Bangladesh are quite comparable with other regional countries.” He put forth some recommendations to conclude, including hunting down and disconnecting illegal gas and electricity connections, encouraging the use of LPG, and introducing the concept of peak pricing for electricity tariffs.
Fouzul Khan’s assertion on electricity tariffs in Bangladesh being ‘comparable’ to other countries in the region was directly contradicted by State Minister for Power, Energy and Mineral Resources Nasrul Hamid.
“There is very low price in our country compared to other countries of the world. We have to come out from subsidy. For this, we need further five to six years,” the state minister said, before going on to dismiss the notion that the government hikes utility prices at all. He rather sees them as ‘adjustments’, either up or down according to subsidy announced in the budget. The government still subsidizes around Tk 6000 crore in the energy sector on an annual basis.
Hamid also said that many industries with factories are being built in Bangladesh without considering how to supply them with energy. “So I ask all businesses to use electricity more and more in your factories, and instead of cars with internal combustion engines to buy electricity cars from abroad.
“Pay your gas and electricity bills regularly and stop illegal connections in your factories,” he also upon the factory owners.
He called upon the industrialists to invest in planned Economic Zones to get uninterrupted supply of gas and electricity. Moreover, a Gas Management Master Plan has been put together by the government. A plan to ensure tolerable electricity price for the consumers is in place.
Before finishing his address, Sanders informed the audience that by the year 2041, the total demand for electricity in Bangladesh will reach 72,000 megawatt; but generation capacity will reach to 79,500 megawatt. Gas demand in industries will reach about 10,000 mmcfd by year 2041.
Abdus Salam, a former senior vice-president of DCCI, said the government should explore new gas fields to meet the country’s demand.
Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA) said: “Gas is a very important matter in our factories. We urge the government not to raise the gas price.”
DCCI President Osama Taseer said that in March 2019, Petrobangla and gas distribution companies proposed average 102 percent gas tariff hike, of which 132 pc gas price hike for industrial users, 96pc gas price hike for captive power and 208pc gas price hike for power.
He said that for smoother industrial production we have to ensure uninterrupted gas supply as well as good PSI (Pound per Square Inch). Due to proposed gas tariff hike, input costs of industry may increase and may have impact on energy intensive industries like Fertilizer, Textile, Denim, RMG, Cement, Steel and allied sectors.
Dr Ijaz Hossan, professor of chemical engineering department of BUET and Dr Badrul Imam, Supernumerary professor of Geology of Dhaka University and others were present there.
Dhaka, Apr 11 (UNB) - Mohammadi Group Managing Director Rubana Huq, also wife of late Dhaka North City Corporation Mayor Annisul Huq, has been elected first female president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for the next two years.
Of the 35 directors elected in the April 6 BGMEA election, only Rubana Huq submitted the form for the president post on Thursday, the last date for filing forms.
According to the BGMEA article 10 (3), she has been declared as a valid candidate for the post, said a press release.
Besides, seven vice-presidents have also been chosen. They are Managing Director (MD) of Chattogram Asian Apparels Mohammad Abdus Salam (first vice-president), Surma Garments MD Foysal Samad (senior vice-president), and Seha Design’s MD SM Mannan (Kochi), DBL Group’s Vice Chairman MA Rahim (Firoz), Tusuka Fashions Chairman Arshad Jamal (Dipu), Frame Sweaters MD Mohammad Moshiul Azom (Sajol) and Al Amin garment’s MD SM Chowdhury (Salim).
This will be announced officially on Friday.
All the 35 directors were elected from the Sammilita Forum for 2019-2021 period.
Two panels -- Rubana Huq-led Sammilita Forum and Design and Source Limited Managing Director Jahangir Alam-led Swadhinata Parishad contested the election.
Dhaka, Apr 11 (UNB) – Industries Minister Nurul Majid Mahmud Humayun visited Walton Hi-Tech Industries (WHIL) at Chandra in Gazipur on Thursday.
During his visit State Minister for Industries Kamal Ahmed Mojumder was also present there.
After visiting the industry, minister said that Bangladesh will easily become a middle income country by 2021 and a higher income country by 2041 if industrial entrepreneurs like Walton come forward.
State Minister Kamal Ahmed Mojumder assured of providing all kind of assistances in protecting protecting and boosting the local industries.
WHIL’s Vice-Chairman SM Shamsul Alam, Directors SM Mahbubul Alam and Tahmina Afrose Tanna welcomed the minister in the morning while Walton’s Executive Director SM Zahid Hasan, Humayun Kabir, Uday Hakim, Alamgir Hossain Sarker and Yusuf Ali, Deputy Executive Director Sharif Harunur Rashid, Shahjada Selim, Senior Additional Director Mohsin Ali Mollah, Additional Director Milton Ahmed and Media Adviser Enayet Ferdous were present.
Dhaka, Apr 10 (UNB) - Investcorp, a global manager of alternative investment products for private and institutional clients, wants to invest in Bangladesh’s several sectors, particularly technology, consumer products and infrastructure.
Its Executive Chairman Mohammed Alardhi expressed the interest at a press conference at a city hotel on Wednesday.
Alardhi came to Dhaka as part their annual Asia Roadshow which allows them to visit countries and economies that support their expansion into Asian markets.
He said the annual Asia Roadshow is focused on strengthening existing connections and fostering new ones. “We work particularly with private equity, real estate, absolute returns investment, credit management and infrastructure.”
“Bangladesh has experienced impressive economic growth over the past five years and offers an array of opportunities across multiple sectors….we’re looking forward to exploring and evaluating opportunities in this country, which has hosted us so warmly,” he Alardhi said.
Mentioning that they work in Bahrain, New York, London, Abu Dhabi, Riyadh, Doha, Mumbai and Singapore, Investcorp executive chairman said they are reinforcing their commitment to their Asian friends and will continue to offer more global opportunities to diversify investments and grow businesses.
Since its inception in 1982, Investcorp has made over 185 Private Equity deals in the US, Europe, the Middle East and North Africa region and Asia, across a range of sectors including retail and consumer products, technology, business services and industrials, and more than 600 commercial and residential real estate investments in the US and Europe, for in excess of US $59 billion in transaction value.