Uber faces new IPO roadblock
SAN FRANCISCO — Uber will have to navigate around a new regulatory pothole in New York on an already bumpy road to its initial public offering of stock next year.
New York City is imposing a one-year moratorium on ridehailing licenses in Uber's largest U.S. market, raising the specter that other cities may adopt similar crackdowns as they try to ease traffic congestion.
If that were to happen, it would be more difficult for Uber to boost its revenue and reverse its history of uninterrupted losses. That, in turn, would affect the price that investors are willing to pay for Uber's stock in the IPO that the San Francisco company plans to make next year.
"This can be viewed as a negative outcome for ride-hailing companies," said Rohit Kulkarni, managing director of SharesPost, a firm that tracks privately held companies such as Uber.
Investors who have poured money into Uber leading up to the IPO have valued it at $62 billion. That lofty assessment reflects how dramatically the 9-year-old company has transformed the way people get around since it introduced the concept of using a smartphone app to summon a driver using their own car to pick them up.
For its part, Uber is trying to make a case that New York City is heading in the wrong direction by curtailing the growth of ride-hailing services to control traffic.