Mind The Gap | Uber waited too long to IPO and now it faces a difficult sell

Uber Technologies’ saga of tribulations and violations continues to sprawl despite the former CEO, Travis Kalanick stepping back. The new CEO Dara Khosrowshahi is fighting a rearguard action while new problems surface. It is a sign of deeper problems with the structure of over valued, private tech companies that should have been pushed into a public listing earlier.

Unethical management behaviour ranging from sexual harassment to ignoring service failures have caused them to be banned from London. A major lawsuit with Alphabet’s Waymo over intellectual property violations hangs overhead. A large 2016 data breach secret involving 57 million users hidden from regulators was exacerbated when the company paid a ransom to the hackers.

Climbing private valuations have helped create in its wake management and governance problems that would have been fatal for most organisations.

Contrast Uber’s US$68 billion valuation as a private company to Facebook’s IPO in 2012 with a peak market cap of US$104 billion, or Facebook’s US$19 billion acquisition for WhatsApp a 55 employee, 450 million user, ad free messaging service. Google’s 2004 IPO valuing it at more than US$23 billion. Netscape’s IPO in 1995 valued the 16 month old company at nearly US$3 billion. Internet valuations continue to soar without much thought about how governance is affected.

A lawsuit between the former chief executive and founder Travis Kalanick with venture capital investor Benchmark, who tried to remove him from the board, was only recently stopped. Yet, Kalanick managed to install two directors to the board given his 10 per cent shareholding.

Uber is a volatile mess operating in a tech industry that requires cohesion and focus on product and service - where tough competitors and shifting technology threaten to erode its lead.