|Bid||27.00 x 2900|
|Ask||27.01 x 2900|
|Day's range||26.61 - 27.22|
|52-week range||25.58 - 47.08|
|Beta (3Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Earnings date||4 Nov 2019|
|Forward dividend & yield||N/A (N/A)|
|1y target est||45.00|
(Bloomberg) -- Travis Kalanick continues to shrink his holding in Uber Technologies Inc.The co-founder and former chief executive officer of the ride-hailing firm sold 6.1 million shares since Thursday for $171 million, according to a regulatory filing.Kalanick, 43, has offloaded 33 million shares so far this month, collecting $882 million. That represents about a third of the stake he held in the San Francisco-based company after Uber’s May initial public offering. The trades came after a 180-day lockup period restricting insider and early investor sales ended on Nov. 6. The stock has slumped 40% since the IPO.The entrepreneur, who was ousted as Uber’s CEO in 2017, created a fund called 10100 last year to invest in “big bets.” His latest business is CloudKitchens, which bets on so-called dark kitchens becoming a backbone of the rapidly expanding food-delivery market. The startup got $400 million of funding from Saudi Arabia’s Public Investment Fund in January, valuing it at $5 billion, the Wall Street Journal reported Nov. 7. Kalanick has invested $300 million in this latest venture.Kalanick is still an Uber director and his remaining 3.8% stake is worth $1.7 billion. He has a net worth of $3.4 billion, according to the Bloomberg Billionaires Index.(Updates with CloudKitchens in penultimate paragraph.)To contact the reporter on this story: Tom Metcalf in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Pierre Paulden at email@example.com, Steven Crabill, Peter EichenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Yandex NV, Russia’s biggest technology company, has figured out how to avoid nationalization or a foreign ownership ban. Big Tech in the U.S. should pay attention: The governance scheme Yandex appears to have worked out in consultation with the Russian government could be a good solution for companies that are de facto public utilities under private control.Yandex, set up in 2000 to monetize a search engine developed in the 1990s by the team of co-founder Arkady Volozh, is as close as it gets in Russia to a Silicon Valley-style internet giant. For a long time, it mainly aped Google’s services for the Russian market, but it has grown into a conglomerate that developed or bought up other businesses, from marketplaces to delivery projects. It’s not just Russia’s Google but Russia’s Amazon and Russia’s Uber, too (it first outcompeted Uber’s Russian operation, then swallowed it up). In fact, when Russian President Vladimir Putin signed a “sovereign internet” law earlier this year, officially meant to keep web services functioning inside Russia should the U.S. cut the country off from the worldwide computer network, many said Yandex would be that “sovereign internet.”Yandex’s size and its ability to match the tech giants have made the company strategic for the Russian government. As early as 2009, Volozh had to protect Yandex from nationalization or from being taken over by one of Putin’s billionaire friends by issuing a “golden share,” which could block the sale of more than 25% of the company’s stock, to state-controlled Sberbank.But the government also could be helpful when Yandex needed it. In 2015, the Russian tech giant filed an antitrust complaint against Google, which had been eating into its market share on mobile, and in 2017 Google had to settle with the Russian antitrust authority, allowing Android smartphone vendors to install Yandex apps. Now, the Russian parliament is considering a bill that would ban the sale of phones and computers without pre-installed Russian software. Yandex would be the main beneficiary.In Putin’s mind, that kind of protection comes at a price: Yandex must guarantee that it will never fall under foreign control. The previous “golden share” arrangement didn’t quite rule that out. Volozh and top employees control the company’s Class B stock, which gives them 57% of the voting power. If those shares are sold or their owners die, Class B shares will automatically convert to Class A ones, which are traded on stock exchanges, and foreign shareholders will end up with the most voting power.In July, legislator Anton Gorelkin introduced a bill that would limit the foreign ownership of strategically important internet companies to 20%. Yandex opposed it, but the government approved it, and it became clear that the bill would be passed. So Volozh began working feverishly on a solution, which was finally announced on Monday “after many months of discussion,” as Volozh wrote in a letter to employees. The company has set up a special body called the Public Interests Foundation, made up of representatives of Russia’s top math, engineering and business schools (most of them owned by the state) and Russia’s big-business lobby, the Union of Industrialists and Entrepreneurs. The foundation will have two seats out of 12 on Yandex’s board of directors, and it will have a veto on all deals involving 10% or more of Yandex stock, big intellectual property sales and any transfer of Russian citizens’ personal data.Putin’s press secretary, Dmitry Peskov, denied that the Kremlin had taken part in the discussions mentioned in Volozh’s letter, but praised Yandex for appreciating the company’s “special responsibility” and the “special attention” on the part of the state that it enjoys. Immediately after the Yandex announcement, Gorelkin called the solution “elegant” and pulled his bill. All this was immediately reflected in a share price spike.This may read like a distinctively Russian story, in which a group of business founders is trying to avoid a state takeover and the Kremlin prefers not to establish formal control over the national tech champion while keeping a close eye on it. The schools provide a convenient smokescreen both for the government and for investors. But what Yandex has done isn’t only relevant within the context of Putin’s Russia. It could be seen as a template for Big Tech, even though Yandex’s market capitalization, at $13.2 billion, is only a fraction of Alphabet Inc.’s ($910.6 billion) or Facebook Inc.’s ($562.9 billion).These two companies that make up the internet’s advertising duopoly, are often discussed along with Amazon.com Inc. as public services rather than mere businesses by politicians on both the right and the left of the U.S. political spectrum. Last year, Republican Representative Steve King of Iowa proposed treating Google and Facebook as public utilities. Senator Elizabeth Warren of Massachusetts, a leading Democratic presidential candidate, would break up some of the Big Tech companies and designate some as “platform utilities” that would be banned from sharing user data with third parties and required to treat all users equally.Obviously, the tech firms are opposed to such heavy-handed regulation, but what they do on their own only brings them closer to a confrontation with governments, both in the U.S. and in Europe. Facebook’s refusal to police misleading political advertising and Google’s data-sharing practices scream for some kind of state interference. Like Yandex, the companies could act preemptively to set up governance structures that would veto business ideas viewed as damaging to society’s interests. Vesting veto powers in councils made up of the representatives of top universities and nongovernmental organizations could accomplish that purpose. If such a structure can win approval even from an authoritarian regime such as the Russian one (with the caveat that academic institutions in Russia aren’t as independent as those in the West), it could probably satisfy most Big Tech critics in democracies, too. The alternative, as in Yandex’s case, could be far more restrictive.To contact the author of this story: Leonid Bershidsky at firstname.lastname@example.orgTo contact the editor responsible for this story: Jonathan Landman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Ride-hailing startup Juno once billed itself as the “anti-Uber”—a kinder, gentler way to get a ride. It’s now closing down its New York-based operations, and inviting customers to join Lyft Inc.Juno is owned by Gett Inc., a Tel Aviv-based ride-hailing company that spent $200 million to acquire the business in 2017. In a statement Monday, Gett announced it was shutting down Juno and that it would start a partnership with Lyft, allowing Gett’s corporate clients to access Lyft rides through the Gett app beginning next year.The company cited “misguided regulations” on ride-hailing companies in New York City, as well as an increased focus on Gett’s corporate clients, as reasons to shutter Juno. “This development reinforces Gett's strategy to build a profitable company focused on the corporate transportation sector, a market worth $1 trillion each year," Gett Chief Executive Officer Dave Waiser said in a statement. Once seen as a promising competitor in the crowded New York City ride-hailing market, Juno first launched in 2016 by touting itself as the driver-friendly alternative to Uber Technologies Inc. It offered an equity package to drivers, promising them a chance to share in the wealth if the business was successful. But big payouts to drivers did not materialize after Juno’s sale to Gett. Juno drivers will be paid in full for all rides completed by Monday evening, the company said.Gett, most recently valued at $1.5 billion, has so far raised more than $800 million in backing from investors. The company had weighed a sale of Juno last summer. To contact the author of this story: Candy Cheng in San Francisco at firstname.lastname@example.orgTo contact the editor responsible for this story: Anne VanderMey at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Uber Technologies, Inc. announced today that Nelson Chai, chief financial officer, will participate in a fireside chat at the RBC Capital Markets 2019 Technology, Internet, Media and Telecommunications Conference on Wednesday, November 20, 2019.
(Bloomberg) -- SoftBank Group Corp. has quietly completed an initial money-raising push for its second technology fund, at a fraction of its targeted $108 billion.The Japanese company has raised roughly $2 billion for the second Vision Fund so it can start backing startups, according to two people familiar with the matter. This stage of the fund-raising process is known as a first close, and SoftBank will continue gathering commitments. A Vision Fund spokesman declined to comment.SoftBank said in July that its second Vision Fund would be even larger than the first, which broke records in 2017 by raising almost $100 billion. This time around, SoftBank has said it is taking more control, committing $38 billion of its own capital and replacing Saudi Arabia, which was the largest investor in the first fund.So far, it is unclear whether there are any outside investors in the second fund. The original Vision Fund was announced in October 2016, but took another seven months for its first major closing with $93 billion in commitments.Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co., which contributed $45 billion and $15 billion, respectively, to the first fund, are reconsidering how much to put into the new fund, Bloomberg News previously reported.Talks with Saudi Arabia are still ongoing, said the people, who asked not to be identified discussing private matters. Mubadala recently told Bloomberg News it had yet to decide on whether it would invest.SoftBank has said the second fund is also expected to collect money from Apple Inc., Microsoft Corp., Foxconn Technology Group and the sovereign wealth fund of Kazakhstan.SoftBank’s second Vision Fund has made at least one investment already. It recently participated in a financing round for Chinese online property listing service Beike Zhaofang, people with knowledge of the matter said. The company previously raised $800 million from investors in March, Caixin reported at the time. A representative for Beike was not immediately reachable for comment.WeWork and Uber Technologies Inc., two of the largest investments made by SoftBank and the first Vision Fund, have performed poorly this year. A recent summary of the first Vision Fund portfolio showed that the fair value of the fund’s stakes in transportation and logistics companies was $31.1 billion as of Sept. 30, just below the cost of those investments. The fair value of the fund’s real estate investments was $7.5 billion, below the $9 billion cost.That’s prompted some soul-searching at the Japanese company.“There was a problem with my own judgment, that’s something I have to reflect on,” SoftBank founder Masayoshi Son said.(Updates with a recent Vision Fund investment in eighth paragraph.)To contact the reporters on this story: Gillian Tan in New York at firstname.lastname@example.org;Giles Turner in London at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Uber Technologies Inc. has been on the wrong side of investor sentiment since its debut on the public market this year, and Barclays analyst Ross Sandler said the ride-hailing company could be “one major announcement” away from a change in the narrative.Shares of the company came under significant pressure around the expiry of its IPO lockup period -- when selling restrictions for early investors and insiders ended -- and Sandler expects those concerns will now diminish, with fourth-quarter results likely to be more impressive than the third quarter.“This cocktail should produce outsized returns for those willing to take the extreme risk,” Sandler wrote in a note to clients, even though sentiment around Uber is currently the most negative in Barclays’ coverage universe.Uber earlier this month said it expected to be profitable by 2021, much earlier than Wall Street expectations, but the optimism was marred by tepid results from the food delivery segment, where booking lagged estimates amid continued competitive pressures. The company is also challenging several states that say they’re misclassifying drivers as independent contractors, and New Jersey hit the company with a $650 million tax bill.For the food delivery business, Eats, Sandler said separating the India segment and potentially combining the U.S. operations with another player would “meaningfully change the profitability outlook and the stock narrative.” The analyst also estimated the core ride-hailing segment’s Ebitda could reach about $4 billion in 2021, more than offsetting losses at other segments and corporate overhead.“Food delivery and ride-hailing in duopoly market structures can be very profitable, like travel, and we think Uber is one catalyst away from the market realizing it,” Sandler said. The analyst has an overweight rating on the stock, with a price target of $40, below the average price target of $45.Uber shares rose 0.8% in pre-market trading on Friday. The stock has lost over 42% since the May IPO. Yet despite the rout, Wall Street analysts are overwhelmingly positive, with 26 recommending buying the shares, 11 advocating holding and only one with a sell rating, according to Bloomberg data.To contact the reporter on this story: Esha Dey in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Steven Fromm, Courtney DentchFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The rise of private investment is a “terrible problem” for everyday investors cut out of companies’ strongest returns, says top venture capitalist Ben Horowitz.
Restaurants are doing away with dining rooms as consumers increasingly order food deliveries through apps such as Uber Technologies Inc's Uber Eats and GrubHub Inc. The newest Chopt Creative Salad Co location, which opened Tuesday in New York, is unlike any of the chain's other 61 sites. Atlanta-based Chick-fil-A Inc has similar sites in Nashville and Louisville, where customers order and prepay online with the option for delivery or pickup.
Thousands of self-employed drivers have received payouts for lost earnings through illness, accidents or having a baby since Uber's scheme was launched.
(Bloomberg) -- Chicago Mayor Lori Lightfoot wasn’t able secure state legislation that would bring in new cash from property sales in 2020 or improve the chances of a casino coming to the city in future years.The Illinois General Assembly adjourned on Thursday without voting to change the tax structure of a proposed casino in the city, which is expected to make the project more appealing for potential operators. Her proposal for a progressive real estate transfer tax also faltered during the six-day veto session held during October and November.Lightfoot’s 2020 budget proposal, released in October, projected $50 million in revenue from a graduated real estate transfer tax, which needs state approval. She also had been pushing lawmakers to lower the tax structure on a proposed Chicago casino, which could generate as much as $215 million annually for later years.“While we are disappointed that a much-needed fix to the gaming bill won’t be made during this compressed veto session, the Chicago casino is still very much in the sight-line thanks to the progress we’ve made with our state partners,” Lightfoot said in statement on Thursday.Even though lack of progress on the casino law won’t impact the city’s fiscal 2020 budget “this fiscal challenge looms large” for future years, she said. The city expects to draw money from a casino when its built to pay down some of the city’s rising pension costs and the state expects to use proceeds for infrastructure.“Thus, the heightened sense of urgency remains,” Lightfoot said.Budget StrugglesEarlier on Thursday, Lightfoot told reporters that if the graduated real estate transfer tax doesn’t move during veto session, she may try again next year.Lightfoot is working to fill an $838 million budget shortfall, the biggest in recent history, as the city’s payments to its four massively underfunded pension plans ramp up in the coming year. Chicago is struggling with a $30-billion shortfall across its retirement system after years of not paying enough to the funds. The city’s mandated contributions to the funds climb to $1.68 billion in 2020, budget documents show. Revenue from a Chicago casino would help shore up the police and fire funds, according to Lightfoot.Without a change in the tax structure, the Chicago casino would face an effective tax rate of approximately 72%, according to an Illinois Gaming Board report.While the Illinois General Assembly made some technical changes for gaming operations during the veto session, “work remains to make sure the Chicago casino opens,” Jordan Abudayyeh, Illinois Governor J.B. Pritzker’s spokeswoman, said in an emailed statement.“The governor is committed to continuing to work with the city and other stakeholders to finalize this important element,” she said.Other OptionsAfter weeks of negotiations between state and city officials, Illinois Representative Bob Rita had introduced a House amendment to a Senate bill to shift the tax structure for a proposed Chicago casino to a progressive rate. The legislation has been referred to the House Executive Committee but the chamber didn’t hold a vote.Lightfoot has said she would consider spending cuts and hasn’t ruled out raising property taxes more to close the budget gap if the real estate tax measure wasn’t approved by state lawmakers. The city is planning to refinance $1.3 billion in debt and is projecting $215 million in savings from such a deal, Chief Financial Officer Jennie Huang Bennett said Tuesday. That’s $15 million higher from the previous savings estimate.“Investors would like to see the city deliver a balanced budget, and believe that the administration has a number of options to reach this goal, given the home rule status of the city,” Dennis Derby, a senior credit analyst and portfolio manager at Wells Fargo Asset Management, which holds $41 billion in municipal assets under management, including Chicago debt. “We believe that if the real estate transfer tax is not enacted, the administration would explore other revenue and cost saving options to balance the budget.”Uber FightWith almost two weeks left until council members are expected to vote on the mayor’s first budget, Lightfoot’s spat with ride sharing companies escalated over the spending plan’s proposed fees to ease congestion. The plan would increase costs for single-passenger rides downtown and lower the cost for shared rides in neighborhoods, generating an estimated $40 million, according to city estimates.“This means that people opting for the luxury of riding alone downtown will pay a little more,” Lightfoot said Wednesday.Uber Technologies Inc. emailed Chicago users this week to blast the mayor’s proposal, calling it the “highest ride sharing tax in the country.” Uber has proposed an alternative plan that would raise $54 million for the city, according to Harry Hartfield, a company spokesman. Uber’s plan would expand the kinds of trips that would be subject to fees beyond downtown, according to a copy of Uber’s proposal. Lightfoot dismissed Uber’s plan on Wednesday and said the company will throw “hail Marys” to avoid more regulation.The Civic Federation, which tracks the city finances, said it supports Lightfoot’s proposed fiscal 2020 budget but has “several significant concerns,” according to a report released Wednesday.“The Mayor and her team have identified a number of creative avenues to fill an enormous budget gap,” Laurence Msall, president of the Civic Federation, which tracks the city’s finances, said in a release on Wednesday. “However, this plan leaves very little room for error.”To contact the reporter on this story: Shruti Date Singh in Chicago at email@example.comTo contact the editors responsible for this story: Elizabeth Campbell at firstname.lastname@example.org, Michael B. MaroisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Your mother probably told you never to get in a car with a stranger. The multibillion-dollar global ride-hailing industry depends on your ignoring her. If they want to earn that trust, though, companies need to rethink the tradeoff they’ve long made between safety and cost.Around the world, passengers are now hailing more than 10.5 billion rides a year. Not surprisingly, some have ended in tragedy. Uber Technologies Inc. came under fire in India after a 26-year-old woman was raped by one of its drivers in 2014, and local rival Ola has faced a similar backlash. In the U.S., Lyft Inc. has been sued by multiple women who say drivers sexually assaulted them.Last year, within the span of three months, two female passengers were murdered by drivers of China’s ride-sharing company, Didi Chuxing Inc. Didi’s Hitch carpooling service once was marketed almost as a cross between Uber and Tinder: a taxi service that let drivers and passengers rate each other by appearance. Didi halted Hitch in August 2018 after an outpouring of anger from state media, regulators and China’s version of deleteuber.Last week, Didi announced plans to restart Hitch on a trial basis in seven Chinese cities by the end of the month. The decision follows a “comprehensive safety review and product revamp,” as well as the introduction of a new women’s safety program that includes better “risk analysis” and an updated in-app security assistant. Didi plans to spend 2 billion yuan ($285.5 million) on safety measures this year, including more frequent use of facial-recognition technology — to ensure drivers are who they say they are — and a deeper review of abnormal driving patterns, as well as more regular safety tests for drivers.But the key to the Hitch relaunch were new restrictions on the program. The service was to be limited to trips under 50 kilometers (31 miles) and women would only have been able to ride between 5 a.m. and 8 p.m. By contrast, men could keep riding until 11 p.m. After an online backlash, the company revised the service to run only until 8 p.m. for both men and women.While the company’s intentions were good, more obviously needs to be done. A sophisticated analysis of high-risk scenarios won’t help you if you’re stuck in the backseat within an inch of your life. And to assume that a woman will only be raped and murdered between the hours of 8 p.m. and 5 a.m. more than 30 miles from her pickup point is clearly a bit naïve.What the ride-hailing industry in China and elsewhere really needs to do is reexamine who’s allowed to drive in the first place. It’s hard to say whether the measures Didi is now implementing would have screened out Zhong Yuan, the 28-year-old Hitch driver who was executed in August for murdering his 20-year-old passenger. After passing background checks and providing documentation, you can still become a Didi driver in 10 days or less.Instead, companies should be raising the barriers to entry so they’re hiring fewer, better drivers. And if they won’t, governments should step in. In Malaysia, regulators now require aspiring drivers to pass written exams and health checks, and to register for specific permits. Roughly a third of applicants have failed the exam thus far, Transport Minister Anthony Loke said last month, and more than 20% of Grab drivers have reportedly quit to avoid complying with the stricter regulations.Singapore imposed new rules earlier this year to bring ride-hailing companies closer in line with taxi operators. The regulations were proposed less than a week after my Bloomberg News colleague Yoolim Lee wrote about a Grab accident that left her with a broken neck and at risk of stroke. She estimated that, around the time of the incident, nearly half of private-hire drivers in the city didn't have the proper license and shouldn't have been driving. While fewer drivers doesn’t necessarily mean safer drivers, a steeper commitment at least means they have a lot more at stake to protect their livelihoods.The genius of the gig economy is the ability to make money from underutilized, ubiquitous skills. Yet the model may have been taken too far. Just because you can make an omelet doesn’t mean you should run a diner. So why should you drive professionally just because you have a license?Shrinking the supply of drivers will obviously make rides more expensive. But it’s worth judging the prospect of higher prices against the long cycle of the internet economy. The Web has made everything from academic research to air travel cheaper and easier to access. At the same time, quality goods and services can’t be free forever: We’ve seen this in the news business, where websites that once offered unfettered access to their journalism (including Bloomberg.com) have implemented paywalls. If fewer drivers means safer rides, that’s a price most people should be willing to pay. (Corrects fifth and sixth paragraphs to show Didi revised its initial policy. )To contact the author of this story: Rachel Rosenthal at email@example.comTo contact the editor responsible for this story: Nisid Hajari at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Rachel Rosenthal is an editor with Bloomberg Opinion. Previously, she was a markets reporter and editor at the Wall Street Journal in Hong Kong. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Startups and tech companies such as Uber, Airbnb, Gojek, Bird and Compass operate in many cities and often multiple countries, and they typically have a repeatable playbook for each time they arrive in a new place.What Gojek, the food delivery and rides startup in Southeast Asia, learns about optimal pay for couriers in Jakarta can translate, at least in part, to Ho Chi Minh City. Airbnb’s experience in navigating local bureaucracies has been honed from its experience in hundreds of cities around the world.That’s not necessarily true for the people, industries and policy makers with whom these companies work. The Gojek courier in Ho Chi Minh City doesn’t necessarily know how to avoid the pitfalls his counterparts in Jakarta already encountered. A city planner in New York may not have the luxury of learning from a counterpart in Paris what taxes or guardrails were effective for Airbnb rentals in that city.The companies are armed with centralized knowledge and act consistently based on those experiences. On the other side, there is often highly fragmented knowledge and action by the contract drivers, homeowners, mom-and-pop restaurants, local real estate agents, trucking companies and governments that deal with startups trying to shake up how the real world functions.This imbalance is what I think about when I read articles like this one about hotel operators, delivery couriers and others who feel they got the short end of the stick from startups backed by SoftBank Group Corp. or its Vision Fund. Bloomberg News has also covered the continuing city-by-city or state-by-state efforts to tax or put limits on on-demand companies such as Airbnb and Uber. (Disclosure: A family member works for a labor organization that has advocated for legislation of short-term home rentals, such as those provided by Airbnb.)There are exceptions. Chain restaurants that deal with delivery startups have the advantage of identifying patterns in their dealings with the tech disruptors, as do multi-city adversaries such as hotel industry trade groups. U.S. cities that were caught off guard by on-demand ride services a few years ago learned to move more quickly when scooter-rental companies came to town. It helped that cities could force companies to comply by impounding scooters, said Brooks Rainwater, director of the Center for City Solutions at the National League of Cities.Coordinated knowledge and action isn’t easy, though. In recently published research on regulating ride-hail services, the New York University Rudin Center for Transportation found that local policy makers were so overwhelmed that it was difficult for cities to learn best practices from one another. Rainwater said that some cities were coordinating a few years ago on effective policies for on-demand ride companies. Then the companies and some lawmakers pushed to take action out of city planners’ hands in favor of statewide rules. Meera Joshi, an NYU visiting scholar and one of the authors of the Rudin Center’s report, said some cities are coordinating directly or have been inspired by others. Mexico City is taking steps that may lead to sliding, per-kilometer fees for on-demand rides similar to those of Sao Paulo, which imposed the surcharges to mitigate traffic congestion. New York and Chicago, she said, gained confidence from talking to each other about compelling ride companies to provide data that can help cities with transportation planning and other goals. The superior knowledge and power of sprawling companies isn’t unique to on-demand startups, of course. When General Motors builds a factory, Walmart opens a distribution center and Amazon pushes for a local tax break, the lawmakers, workers and business partners with whom they’re dealing probably don’t have the same experience as a company that has gone through this process many times before.The scale of the startups, however, is on a whole other level. Uber had 3.9 million contract drivers and couriers working on its system at the end of 2018, and it operates in more than 700 cities. There are more than 100,000 cities with Airbnb listings and more than 7 million listings globally. There are not 100,000 cities with a Walmart.The bigger the startups get, the more the parties they deal with will become fragmented. That is a lot of people potentially learning from scratch how to work a system the companies have mastered.A version of this column originally appeared in Bloomberg’s Fully Charged technology newsletter. You can sign up here.To contact the author of this story: Shira Ovide at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Travis Kalanick sold 6.1 million shares of Uber Technologies Inc. just days after disposing of a fifth of his stake, bringing the total offloaded to $711 million this month.The 43-year-old entrepreneur sold $164 million of his holdings in the ride-hailing company this week, according to a regulatory filing Wednesday. Last week he disposed of stock worth about $547 million.The sale underlines Kalanick’s focus on other investments, including CloudKitchens, which he funded with $300 million. A $400 million injection from Saudi Arabia’s Public Investment Fund valued the food startup at $5 billion, the Wall Street Journal reported last week.His remaining 4.2% stake in Uber is valued at $1.9 billion, or less than two-thirds of his $3.4 billion fortune, according to the Bloomberg Billionaires Index. When he was Uber’s chief executive officer, Kalanick said he retained all his shares in the company. That changed after his ousting in 2017. He sold stock in private transactions and had a 6% stake at the time of its May initial public offering.Kalanick has moved quickly to offload Uber shares since the IPO. This month’s trades came after a 180-day lockup period restricting insider and early investor sales expired last week.Uber shares fell 3.9% on Nov. 6 when its lockup expired. Beyond Meat Inc. has done even worse, falling 22% since its lockup ended. Shares in Avantor Inc., Fastly Inc. and Luckin Coffee Inc. all rose Wednesday when their restrictions were lifted.To contact the reporter on this story: Tom Metcalf in London at email@example.comTo contact the editors responsible for this story: Pierre Paulden at firstname.lastname@example.org, Steven CrabillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Norwest Venture Partners, a former investor in Uber and Spotify, said on Thursday it closed its largest fund to date at $2 billion (£1.56 billion), bringing its total capital under management to $9.5 billion. Jeff Crowe, managing partner at Norwest, said the larger fund size helps the firm keep its previous pace of investments. High-profile flops of initial public offerings have some startups and investors jittery about a bubble burst, but Crowe said the latest fund was still as easy to raise as the one in 2018 thanks to its previous funds’ performances.
(Bloomberg Opinion) -- I’ve always thought someone should write a book titled “All I Really Need to Know About Stock Investing I Learned in the First Year of B-School” or something like it. The gist would be that investors should look for companies that:Make money or have a realistic chance of making money soon. Have sensible policies that align the interests of management and shareholders. Sell for a reasonable price.Granted, that could just as easily be scribbled on a cocktail napkin, but the point of the book wouldn’t be to catalog the nuances of equity investing — investors already have Benjamin Graham and David Dodd’s terrific tome “Security Analysis” for that — but to have a handy reminder on the bookshelf of how to get the crucial parts right. I’d like to think such a book would have saved Masayoshi Son, the chief executive officer of SoftBank Group Corp., some heartache. SoftBank reported a staggering $6.5 billion quarterly loss last week, resulting from Son’s sour investments in WeWork, Uber Technologies Inc. and other once-highflying startups. In comments accompanying SoftBank’s results, Son acknowledged that, “There was a problem with my own judgment, that’s something I have to reflect on.”One problem, according to Son, is he overlooked that startups need solid governance and a path to profits. The book would have covered that, and neither WeWork nor Uber would have credibly checked those boxes. And don’t forget about price. It’s not easy to make money when paying a fortune for companies, as Son routinely does, no matter how good their governance or path to profits.None of that mattered in recent years because investors eagerly paid ever-higher prices for startups. The frenzy has no doubt contributed to Son’s confidence, on display again last week, that he has a knack for venture investing. It’s true that SoftBank’s stock outpaced the Cambridge Associates U.S. Venture Capital Index by 3.1 percentage points a year through March, including dividends, since SoftBank embarked on its recent spree of acquisitions in 2010, and by 2.7 percentage points a year since it launched the Vision Fund in 2017, which houses its stakes in WeWork, Uber and roughly 70 other startups.If SoftBank got a boost from Son’s venture bets, it’s almost certainly not alone. Consider that the net internal rate of return of the bottom quartile of the Venture Capital Index was negative every year from 1997 to 2006, with an average IRR of negative 4.8% during the period. The following decade was just the opposite. The bottom quartile posted a positive IRR every year from 2007 to 2016, with an average of 6.5%. In other words, venture investors have been paid for just showing up in recent years.Investors’ loose standards have also spilled into public markets, as I recently pointed out. Glamour stocks, or companies with big expectations and pricey shares, but little or no profit, outpaced shares of the cheapest and most profitable companies by 12.5 percentage points a year over the last five years through September, according to numbers compiled by Dartmouth professor Ken French. The appeal is obvious. Investors love to think they can spot the next big thing, never mind profits, governance or price. Amazon.com Inc. is cited frequently as an example. It generated little or no profit during its first two decades. It’s been tightly controlled by founder Jeff Bezos, a king in all but name. Its price-to-earnings ratio has averaged — wait for it — 227 times since 2002, based on monthly observations. And yet a $10,000 investment in the company when it went public in 1997 would now be worth roughly $11.8 million.But Amazon is the vast exception, of course. As University of Chicago professor Eugene Fama told my Bloomberg Opinion colleague Barry Ritholtz in an interview last week, if you have 100,000 people picking stocks, “one of them will look extraordinary purely on a chance basis.” The same can be said for stocks themselves.There are signs investors are ready to give the dice a rest. Son’s newfound appreciation for profits appears to be more widely shared. Goldman Sachs Group Inc. CEO David Solomon told Bloomberg TV recently that, “there’s got to be a clear and articulated path to profitability” and that he thinks “there’s a little more market discipline coming into play.”Seeing red tends to sober up investors. Glamour stocks are down 9.1% over the last year through September, even as the S&P 500 has returned 4.3%. And that bottom quartile of venture funds posted a negative IRR of 9.2% in 2017, the most recent year for which numbers are available.At some point, the growth-at-all-cost fad will end, if it hasn’t already. But it never disappears, which is why everyone could use a reminder that profits, governance and price never go out of style.To contact the author of this story: Nir Kaissar at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young. For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- The small industrial kitchen located under a concrete maze of freeways in Oakland, California, doesn’t look like much. The former Uber Technologies Inc. employees who occupy the space picked it because it’s cheap (by Bay Area standards) and conveniently located for drivers to pick up food for nearby customers ordering from delivery apps like Uber Eats.Their startup, Virtual Kitchen Co., is one of many entrants in a crowded field of companies renting kitchen space to restaurants desperate to satisfy demand from hungry homebodies. But it’s particularly noteworthy that the founders came from Uber. Travis Kalanick, Uber’s co-founder and former chief executive officer, runs a competing business and Uber itself piloted a cloud kitchen, creating tensions between Uber's former and current CEOs last year.Virtual Kitchen plans to announce a $15 million investment Thursday from venture capital firms, including Andreessen Horowitz, Base10 Partners and others. Stephen Chau, the head of product at Uber Eats, previously invested with money from Sequoia Capital. Uber, which is discontinuing its own experiment in renting kitchen space, isn’t an investor but says the company isn’t bothered by the potential for additional competition. “Anything that supercharges the selection for customers is great for all of us,” said Janelle Sallenave, head of Uber Eats for the U.S. and Canada.Virtual Kitchen intends to differentiate itself from Kalanick’s CloudKitchens and many similar companies by targeting local restaurant chains and smaller spaces. In its home region of the San Francisco Bay, Virtual Kitchen has signed on Poki Time, Big Chef Tom’s Belly Burgers and the Indian chain Dosa. Anjan Mitra, the owner of Dosa, said renting space in the startup’s kitchens to service online delivery customers makes “financial sense” for the business.Ken Chong and Matt Sawchuk ditched Uber to start Virtual Kitchen last year with Andro Radonich, a professional chef. At Uber, Chong led several Uber marketplace product teams, and Sawchuk oversaw Uber Eats. The duo said they were inspired to spin up their own startup after seeing the strain food delivery apps were placing on restaurants. Ade Ajao, a founder of VC firm Base10 and a Virtual Kitchen board member, said the proliferation of similar businesses in Asia and Latin America during recent years has proven the model can work in the U.S.The risk for startups is that Kalanick can easily outspend the competition. He’s worth $3.4 billion, according to the Bloomberg Billionaires Index, and has the backing of a Saudi Arabian sovereign wealth fund, which put in $400 million this year. A spokeswoman for Kalanick declined to comment. Uber experimented with leasing space in Paris last year, stocking it with commercial-grade kitchen equipment. An Uber spokeswoman said the company isn't planning to continue the pilot, because it's capital intensive. Uber posted disappointing results again last quarter and the stock took a hit despite promises from management that it would turn an adjusted profit by the fourth quarter of 2021. Virtual Kitchen relies on a hub-and-spoke model, operating a central commissary where workers from the startup or one of its customer restaurants prepare ingredients about a day before they’re used in meals. Drivers for Virtual Kitchen then ferry those chopped and cooked items to a smaller micro-kitchen, which is usually about 1,000 square feet. That’s where the final 10% of the meal prep, like heating and assembly, takes place before bagging it for delivery.Customers won’t necessarily know when their order comes from a Virtual Kitchen location, as opposed to an actual restaurant. The company isn’t limited to Uber Eats. It says drivers for every major food delivery service in the U.S. come to its spaces. Virtual Kitchen is operating a handful of locations in the Bay Area now and expects to open a dozen more during the next six months. “We want to get this right and learn as quickly as possibly,” said Chong, the CEO. “Our ambitions are national, if not global.”To contact the author of this story: Lizette Chapman in San Francisco at email@example.comTo contact the editor responsible for this story: Mark Milian at firstname.lastname@example.org, Anne VanderMeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Uber launched a set of new safety features in Britain on Thursday as it battles to retain its taxi operating license in the face of concerns about passenger safety. The measures include a discrimination button enabling drivers and riders to report abuse, enhanced safety training for drivers and a direct connection to the emergency services. In September, Uber received only a two-month operating license in London, its most important European market, failing to secure a maximum five-year term in a battle with the regulator Transport for London (TfL) which has previously stripped the app of its right to take rides.
The U.S. Senate Commerce Committee will hold a Nov. 20 hearing on the testing and deployment of self-driving vehicles that will include top U.S. safety officials, as Congress has struggled to pass legislation on autonomous vehicles. The hearing will come one day after the National Transportation Safety Board (NTSB) meets to determine the probable cause of a March 2018 Uber Technologies Inc self-driving vehicle crash that killed a pedestrian in Arizona. Documents made public by the NTSB last week show Uber's system had significant flaws and was not programmed to detect a jaywalking pedestrian.