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According to analysts surveyed for this article, Uber's assessment could be justified in several ways, but for now, they remain difficult to predict.
DA Davidson's senior research analyst, Tom White, said that to justify a $ 100 billion valuation, he was looking for three things. First of all, he would like to see evidence that Uber could significantly improve the growth of its revenues. Second, he would look for signs that the pressure on Uber's margins will not last too long. Third, he would try to understand if investors are willing to pay a premium for Uber in relation to Lyft.
Apart from her carpooling activity, where she competes directly with Lyft, Uber has a chance to differentiate herself if one of her other activities takes off. While Lyft has experienced slower expansion, available in only two countries and focused primarily on carpooling and other areas of mobility, Uber has taken a different approach by expanding to 63 countries and taking on other projects. This could ultimately bode well for Uber.
"I think freight and food are at the heart of the matter, and they are key ingredients in the recipe for success," said Ives. "I think the only thing that stands out in the S-1 is how much revenue and opportunity was important compared to what investors were expecting." Uber Eats, for example, saw gross bookings increase from $ 1.1 billion in the fourth quarter of 2017 to $ 2.6 billion in the fourth quarter of 2018.
Another path to greater profitability is the automation of its carpooling activity. At the moment, Uber only gets a share of each journey it offers, as drivers also take a share. In addition to this, it must strongly encourage drivers and customers to use their services in a competitive market, a factor that Uber has even described as a risk factor for its business. But if the company manages one day to dismiss the driver and instead use autonomous cars, his road to profitability becomes much clearer.
"If self-driving becomes a thing one day, it could make it a very profitable business," said Meeks. But he said that Uber could not rely heavily on that now because "I do not see it as a dominant thing for many years".
Investors are probably already worried about Lyft's performance as Uber prepares his roadshow.
"For better or for worse, these two are somehow attached to the hip," said Meeks.
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