Uber drives up investor value, for some
Cantillon: Ride-hailing app clocked $82bn and made many people very rich
Uber’s IPO at the New York Stock Exchange: main beneficiaries will be Uber founder Travis Kalanick and Amazon’s Jeff Bezos. Photograph: Johannes Eisele
For a company that has never made a profit and says itself that it may not do so in the future, Uber has so far done very well for its investors. This week saw the ride-hailing app, which has had a relatively limited impact on the Irish market, get away one of the biggest initial public offerings in history. Its value, when the button was pushed, was $82 billion (€73 billion), although this declined on Friday when shares opened below their flotation price.
As is normal in such scenarios, the IPO saw a lot of people get very rich, many of whom were so rich already that the actual impact on their life is likely to be minimal.
Chief beneficiary will be Uber founder Travis Kalanick, the ousted chief executive who left the company after allegations of a culture of sexual harassment. Also in line for a windfall is Amazon’s founder Jeff Bezos, a billionaire for whom the Uber IPO will yield a whole 1 per cent of his net worth.
And to add some glamour, a list of celebrities who got in early are reported to have benefited too: Jay-Z and Gwyneth Paltrow are said to be among them.
At the other end of the scale, you have Uber’s drivers. There is no rags to riches story for them in this tale, although Uber has apparently held out the prospect of a bonus, depending on how many rides they notched up.
Specifically, drivers who had completed 40,000 trips before April 7th would receive a $40,000 “driver appreciation reward”. Uber’s own figures suggest the average driver makes about 30 trips per week, meaning it would probably take a very, very long time to get up to bonus level.
This came against a backdrop of visible discontent among Uber drivers, leading to a strike last week to demand better pay and conditions. There have even been reports of drivers sleeping in their cars to save money.
It was a bad look in the run-up to the flotation of a business that relies utterly on the availability of these same drivers, particularly in light of all the wealth it was about to create for an already very rich cohort.