DEBATE: Would an Uber IPO be a good idea?

London Black Cab Drivers To Protest Over Uber Taxis
Source: Getty

The new Uber boss has said the company could go public within 18-36 months – would this be a good idea?

YES - Colin Cooper, executive vice president at Sage People

This year already looks very positive for the IPO market, with several companies making successful public exits – Snap being the most high-profile of these. An IPO represents a major opportunity for technology firms as they look to compete on the world stage, and the financial gains can be enormous. This is particularly pertinent to the technology sector with its focus on the pace and value of growth. Uber is a prime example of a company that could capitalise on this. But this is far from a walk in the park, and for it to be successful it must be managed properly. It’s vital that Uber does not forget its core principles and responsibilities. Employees must be a key consideration and not an afterthought. If Uber decides to take on the exciting challenge of an IPO, it must ensure that it is proactive and clear in its communication with employees. A public commitment to improving the employee experience will not only benefit employee engagement, but also project a solid image to the investment market.

NO – Dr John Colley, professor of practice in strategy and leadership at Warwick Business School

The obvious issue is whether things will get better for Uber under the new chief executive Dara Khosrowshahi. He may improve the company’s culture and reduce its propensity for being sued and drumming up bad publicity. He may even be able to resolve some of the boardroom issues and the problem of the ambitious Travis Kalanick remaining on the board. But can he turn round the losses without losing substantial market share? Market share has been increasing based on driver and customer incentives, which are enormous and subsidised by Uber. Once these are cut, market share is very likely to reduce under pressure from other well-funded competitors such as Didi, Chuxing, Grab, Lyft, and local firms who now have an app. Many overseas markets have been deregulated and already have highly responsive taxis and low fares. Uber has no real advantages in such markets except the investor subsidies – and investors are going to tire of forecasts and more requirements for funds. Against this backdrop, an IPO in the near future is a risky gambit.

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