Uber Is Said to Ready Its Pitch as the Amazon of Transportation

(Bloomberg) — Uber Technologies Inc. and its bankers will hit the road this month with one big name on their lips as they try to entice investors with favorable comparisons to businesses that it seeks to imitate or surpass.

That name is Amazon.com Inc.

Amazon was a money-losing internet bookseller attacking the brick-and-mortar fortress of Barnes & Noble Inc. at the dawn of e-commerce when it raised $54 million in its 1997 initial public offering. Its ascent to world’s biggest online retailer — the everything store — is seen as a model by Uber as it pivots from its maturing but still unprofitable ride-hailing operation to position itself as a global transportation platform.

Uber wants to convince investors that it’s a transportation and logistics market-maker that can build — and then supply — new demand for everything from scooters and bicycles to freight and food delivery, said people familiar with its plans who asked not to be identified because they’re private.

The investor pitch will dwell on the unrealized opportunity ahead, with Uber casting itself as a nascent transportation provider just barely scratching the surface of a multi-trillion-dollar market, according to the people. While Uber may have a 65 percent share of the ride-hailing market in the U.S., Canada, Latin America, Europe, Australia and New Zealand, the company said in its IPO filing Thursday that its share of the entire global transportation market is less than 1 percent.

“It’s wise for them to pitch themselves as a platform and make the connection to Amazon,” said Kathleen Smith, principal of the research firm Renaissance Capital. “If you can’t talk about earnings, you better have a plan to talk about a platform, because that’s the only way investors will feel comfortable with losses.”

Uber’s long-awaited roadshow for what is expected to be 2019’s biggest U.S. IPO is expected to kick off on April 26, the people said. The San Francisco-based company is seeking to raise about $10 billion and to be valued at about $100 billion, people familiar with the matter have said.

Price Range

Its bankers have discussed setting the price range for the offering at $48 to $55, based on a notice to convertible debt holders and on Uber’s last valuation, the people said. Uber hasn’t decided on a price range, the people said.

No final decisions have been made and the timing and details of the presentations may change, people familiar with Uber’s plans said.

Uber, the world’s largest ride-hailing company, is working with underwriters including Morgan Stanley, Goldman Sachs Group Inc. and Bank of America Corp. to craft its pitch. The presentations will feature comparisons to China-based e-commerce kingpins Alibaba Group Holding Ltd. and Tencent Holdings Ltd., in addition to Amazon, said a person familiar with the situation.

Smaller food-delivery and logistics businesses will also be cited, the people said. Companies to be compared to the Uber Eats business might include Chicago-based GrubHub Inc., as well as international food-delivery services such as China’s Meituan Dianping, Germany’s Delivery Hero SE, Amsterdam-based TakeAway.com NV and Just Eat Plc in the U.K., said one of the people.

Distancing Lyft

Lyft Inc., which operates in the U.S. and Canada, will also serve as a point of comparison, the person said. But even with Lyft, as well as other companies, precise comparisons are difficult to peg because of Uber’s diverse business verticals, the person said.

Uber may also want to distance itself from Lyft, which priced its shares at $72 each in its $2.34 billion IPO in March. The shares jumped 21 percent at the opening bell in their trading debut but have sunk since then, closing at $59.90 on Friday

The bankers will also tout the public company experience of Uber’s management team, which presented its business to bank analysts last month, one of the people said. Chief Executive Officer Dara Khosrowshahi came from Expedia Group Inc. in 2017. Chief Financial Officer Nelson Chai, a longtime banking executive who weathered the 2008 financial crisis at Bank of America, joined Uber last year.

Representatives for Uber, Morgan Stanley, Goldman Sachs and Bank of America declined to comment.

Explaining Losses

On Thursday, Uber gave potential investors their first full look at the company’s financial results and operations.