SAN FRANCISCO — Uber, the ride-hailing service that has upended transportation around the world, took a major step toward the largest initial public offering in years when it officially unveiled its finances in a prospectus on Thursday.
The offering, which could value Uber at around $100 billion, is expected to reverberate through global financial markets and to solidify the company’s position as one of the most consequential technology firms of the past decade. The share sale would be the biggest since the Alibaba Group of China began trading on the New York Stock Exchange in 2014, and would peg Uber’s value at more than four times that of United Airlines’ parent and double that of FedEx.
But the prospectus renewed questions about how sustainable Uber’s business actually is. The company said in the filing that it lost $1.8 billion in 2018, excluding certain transactions, on revenue of $11.3 billion. And the prospectus also showed that its rocket-ship trajectory for revenue growth was beginning to slow.
Uber’s archrival in North America, Lyft, went public last month at a valuation of $24 billion. But Lyft, which is also deeply unprofitable, fell below its offering price in its second day of trading as investors questioned whether it could make money. This week, Pinterest, the digital pin board company that also is losing money, set a price range for its public offering that values it below that of its last private market peg.
One potentially major concern for Uber is that it does not appear set to turn a profit in the near future. In the United States, the company is burning cash as it battles Lyft, cutting prices for passengers and spending to recruit drivers. In other parts of the world, Uber also provides discounts to riders and incentives to drivers as competitors like Ola fight for market share. And the company is investing heavily in businesses like food delivery and scooters.
“We will not shy away from making short-term financial sacrifices where we see clear long-term benefits,” Dara Khosrowshahi, Uber’s chief executive, wrote in a letter accompanying the prospectus.
To lessen the surprise of its losses when it did finally go public, Uber has disclosed its quarterly results for two years even though, as a privately held company, it was not obligated to do so. Still, the prospectus invites new scrutiny.
[Here is a glossary to help make sense of Uber’s jargon.]
Uber did not disclose in the filing the valuation it is seeking from public investors; it was last valued at $76 billion in the private market. Its offering is being led by Morgan Stanley and Goldman Sachs. The company’s shares are set to begin trading next month on the New York Stock Exchange under the symbol UBER.
In its filing, Uber said it made a profit of $997 million in 2018, largely from selling parts of its business in places like Southeast Asia and Russia. Excluding those gains, plus other items, Uber lost $1.8 billion for the year. In 2017, its net loss totaled $4 billion.
Revenue growth also slowed. In 2018, its revenue rose 42 percent to $11.3 billion from a year earlier. But revenue in 2017 had more than doubled from 2016. Uber revealed in the prospectus that it is heavily dependent on just five cities for nearly a quarter of its total bookings: Los Angeles, New York, San Francisco, London and São Paulo, Brazil.
Its number of monthly users, who turn to Uber for not only rides but also services like food delivery, was 91 million in 2018, up 34 percent from a year earlier. But user growth, which had risen 51 percent in 2017, also slowed.
At the same time, Uber’s spending continues to rise, reaching $14.3 billion last year, up 19 percent from 2017.
While revenue growth in its ride-hailing business slowed, its food delivery service, Uber Eats, is soaring. Revenue from Uber Eats nearly tripled to $1.5 billion in 2018 from $587 million a year earlier.
Founded by Garrett Camp and Travis Kalanick in 2009, Uber began as an on-demand black car service for wealthy clients, riding the wave of mobile-technology innovation that followed Apple’s introduction of the iPhone in 2007. Mr. Camp conceived of the service, initially called UberCab, because of the difficulties he had hailing a taxi in San Francisco.
Silicon Valley tech workers were quick to embrace Uber, but it wasn’t until around 2013 that the service took off more broadly. That year, Uber introduced UberX, a low-cost ride-sharing service that allowed anyone with a car and a license to drive for the company on a freelance basis. UberX was a hit, and the company expanded rapidly elsewhere, often by flouting local and state transportation laws.
