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include cars, bikes, and public transportation options.
Public transit agencies are becoming customers of fleet operators, which can provide “microtransit” services such as shuttles that cover many of the heavily traveled routes where consumers might previously have relied on taxis or ride-hailing companies.
Uber has become a participant in some of these new models, and Khosrowshahi, the former CEO of online travel conglomerate Expedia, has also taken steps to make the Uber app serve as a one-stop trip planning source that displays multiple options, rather than simply remaining a conduit to Uber’s own ride-hailing service. He is also diversifying Uber’s business lines. Uber Eats now delivers 10 percent of the company’s gross bookings, the company has said—but the fact that a new unit could attain such a significant percentage share of total sales “may be masking a slowdown in Uber’s main business,” Bloomberg’s Eric Newcomer conjectured.
All the competitors in the mobility field are facing headwinds from an increasingly active regulatory environment. For example, New York City, a target market for ride-hailing companies, this week became the first U.S. city to rein in the proliferation of cars from Uber and its competitors that are allegedly worsening traffic congestion on crowded streets. The city placed a temporary cap on the number of new licenses for such cars in a bill that also opened the door to a minimum wage for city drivers summoned by apps.
To meet these challenges, Uber benefitted from a boom period in venture funding to build its multibillion-dollar war chest, as Bloomberg’s Ovide points out. But as for an IPO, will it get the timing right?
If the company had gone public earlier, it might have profited from Silicon Valley’s characteristic form of magical thinking—that a company growing users really fast will somehow become proportionally valuable. Now Uber may need to face the metrics of stodgy fundamental business analysis that Ovide raises—will it grow a proportional profit?