The Uber IPO is finally upon us, and it has proved divisive. The critics point to Uber’s billion-dollar losses and SEC filings so meager, a Financial Times commentary called them “an outrage.” A Bloomberg column even questioned the growth of this growth company, noting that the money coming in to the core ride-hailing service appears to have plateaued.
Yet when the company is listed on the New York Stock Exchange, Uber will almost certainly raise something like $8 billion or $9 billion, with a valuation of about $82 billion. How?
Every stock-market pick—and especially every tech IPO—is a bet not on the world as it is, but on the world as it might be. The stock market is applied futurism, and as measured by the divergence between its profits and price, Uber’s story is as compelling as any that have come along since the dot-com boom. People are buying the idea as much as the operation.
Uber, as outlined in its IPO prospectus, represents a vision of the future in which labor will be parceled out by algorithms that match supply to demand in real time. Workers will move fluidly between gigs, untethered to traditional jobs. And at the same time, the market for transportation of all kinds will become unmoored from large asset purchases—such as cars—as well as public services. The new urban paradigm will be private, shared, on-demand services through which you call a ride, hop on a bike, or rent a scooter. In cities across the world, this will prove attractive and spread to other forms of logistics—trucking, food delivery, shipping, drone delivery—and Uber will take an ever larger percentage not of the ride-hailing market share, but of the total number of miles traveled.