Drivers protest around the world as Uber plans to raise $8B in US listing

Global Business

Drivers protest around the world as Uber plans to raise $8B in US listing

A day before Uber’s initial public offering, drivers for Uber and competitors went on strike in cities around the world including New York. They were protesting what they said was low pay and poor working conditions.

CGTN’s Karina Huber reports.

The protests highlighted just a few of the numerous complaints leveled at the company since it was founded ten years ago by Travis Kalanick in San Francisco.

He stepped down as CEO in 2017 after being accused of fostering a toxic work culture where sexual harassment and discrimination occurred.

“The class of people who are about to receive the largest wealth transfer in American history – this millennial generation – has displayed a consistently much higher interest in corporate culture and social impact than their predecessor generations,” said Max Wolff, Managing Partner at Multivariate.

“Uber has to, I think, treat these issues very carefully. Their brand in North America at least is still somewhat impaired,” said Tom White, Senior Internet Analyst, D.A. Davidson & Co.

White, who has a neutral rating on Uber said repairing that image is just one of the many challenges the company faces as it prepares to go public – in a listing that could raise $9 billion.

“Long-term we think their scale could translate into a better margin profile relative to its peers but the near-term trends in the business – both slowing growth and profitability are what keep us on the sidelines there,” said White.

Uber is facing stiff competition in its core ride-sharing business in the U.S. and abroad. Uber Eats – it’s food delivery service is also under pressure from other rivals. Since its inception ten years ago, the company hasn’t turned a profit losing at least one billion in the first three months of 2019.

Executives said investors have to take the long view. Comparing themselves to Amazon, they said Uber plans on becoming a one-stop shop for all things transportation. Wolff is skeptical – pointing out that Amazon was profitable ten years in.

“It’s great to have vision but when we get a heavy dose of vision around earnings or an IPO story from a tech company, it’s usually a good time to be cautionary,” said Wolff.

We’ll find out very soon whether investors are willing to overlook some of Uber’s many challenges – shares begin trading at the New York Stock Exchange on Friday.

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