UBER

Analysis of Uber share price

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Do you plan to speculate soon on the Uber share price online using CFDs on your preferred trading platform? In this case, we suggest that you discover in this page all the information you will need to carry out analyzes of its course. Here we provide general information on the stock market price of this asset as well as other useful information about this company including its activities, its partners and its competitors.We will conclude this article with some advice on completing your own comprehensive fundamental analysis of this asset.

Latest news

Successful IPO of Airbnb

11/12/2020 - 08h03

While the health crisis is hitting the tourism sector hard, the Airbnb group has succeeded, this morning, in entering the stock market. Let's look back together at the reasons for this success and this introduction.

Elements that can influence the price of this asset:

Analysis N°1

Solutions that facilitate the recruitment of drivers for its service thereby promoting an increase in the number of drivers could improve the quality of Uber services with a lesser waiting time for passengers, therefore increased popularity and higher profitability over the long term.

Analysis N°2

The international expansion of the Uber group, notably on certain markets wherein the taxi sector is harshly competitive such as India may also offer interesting growth opportunities.

Analysis N°3

The introduction of this company onto the stock markets led to new investors and therefore supplementary funds which should enable Uber to develop new services and expand its position on the market.

Analysis N°4

Uber can also rapidly implement new niche services such as school transport, transporting patients to hospitals, or transporting family pets to a vet and these can provide supplementary sources of income.

Analysis N°5

The increasing anger from traditional taxi companies due to the competition, judged by them to be disloyal due to the prices charged by Uber and the shorter waiting times, may cause problems for Uber in certain countries.

Analysis N°6

The Uber drivers may also express their discontentment relating to the reduced profit margins of their activity which draws a negative publicity that can discourage future drivers that may have thought to join the system.

Analysis N°7

Changes in regulations that forbid Uber from exercising its activities in certain countries could also setback its development.

Analysis N°8

Finally, and as we explained briefly earlier when listing the weak points of this group, the growing competition that Uber faces could lead to a fall in prices that could contribute to a decrease of drivers.

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General presentation of Uber

Let us start this article concerning Uber shares by summarising the precise activities of this company in order to assist you in better understanding the challenges of this activity sector so you can complete improved analyses.

The Uber Group, previously known as UberCab, is a technological company based in the United States that has the main activity of developing and managing mobile applications that enable communications between transport drivers or chauffeurs and their passengers.

The applications created and owned by Uber are used worldwide and therefore present in numerous countries around the world.

One of the particularities of this company is that it has implemented a system offering regular services in the same way as occasional services which has caused it a number of problems.

Uber offers different services including the following:

  • UberX, professional drivers offering standard vehicles.
  • UberBerline, professional drivers offering luxury vehicles.
  • UberVan, professional drivers offering vans with a capacity of 6 people.
  • UberPOP, individual occasional drivers using their own personal vehicle (service suspended in the summer of 2015).
  • UberPool, this enables a passenger to share their route with another passenger situated at the same place and going in the same direction.
  • UberEats, offering the delivery of meals from restaurants.This requires the use of the UberEats application.
  • UberGreen, professional drivers offering electric or hybrid vehicles.
  • UberAccess, professional drivers offering vehicles equipped for those with disabilities or reduced mobility.

More recently Uber again diversified its services by offering a meals delivery service named Uber Eats.

Analysis of Uber share price
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The major competitors of Uber

Knowing the major competitors of the Uber group will undoubtedly also assist you at better analysing the growth possibilities as although this group was a pioneer in its domain numerous other companies have rapidly jumped into this new market representing fierce and merciless competition.

Taxify

Concerning the European and American markets, the major competitors to Uber are of course the taxi, private chauffeurs and Taxify.There is also the Lyft Company which is currently one of the most direct and serious competitors of Uber.

Yandex

But other competitors should also be taken into consideration in other geographical sectors and on other continents.In Russia and notably in one particular part of Asia you should take into account the significant competition from the internet giant Yandex that remains leader of this sector.

Didi Xuching

Didi Xuching continues to be the VTC leader in Asia with a major part of this market sector.

Grab

Finally, Grab is also leader in this activity sector in certain Arabic countries.


The major partners of Uber

To increase their visibility and position worldwide, the Uber Group has not hesitated to implement a number of partnerships with major companies.As the announcement of these partnerships can have a major impact on this company’s share price it can therefore be extremely useful to follow them closely.Here are three recent examples of partnerships that will assist you in understanding the importance of such alliances.

Starbucks

Notably in 2018 the Uber Group implemented a major partnership with the Cargo Group.This partnership had the objective of providing Uber drivers with the possibility of generating supplementary revenue by offering certain products for sale during their trips.The Cargo Group benefits from partnerships with Kelloggs, Mars and Starbucks and could therefore provide drivers with a free box stocked with different products from these brands which would be available for sale as part of a Premium service for its clients.It should be noted that over a million products have already been sold through this service.These boxes would be collected from Uber support centres and would notably include chewing gum, chocolate bars as well as beauty products, mobile chargers and other items that may interest their passengers.

BNP Paribas

Still in 2018, Uber also became associated with one of the major European banking groups, BNP Baripas, with a partnership aimed at assisting VTC drivers that use this application for purchasing recent used vehicles.With this alliance the Uber drivers could therefore benefit from specific acceptance criteria to obtain this financing and even use a dedicated website that offer them direct access to a large range of used vehicles carefully chosen to meet their requirements that respect the VTC regulations.The drivers can thereby reserve their vehicle directly online using this service.To enable this partnership the BNP Paribas, through their subsidiary Cetelem, created a specific financing model for this Uber partnership.This will undoubtedly enable Uber to recruit more drivers that are often reluctant to launch into this business due to the necessary purchase of a vehicle, notably by the need to obtain credit in their specific professional capacity as an independent worker.

Toyota

More recently again it was with the Toyota Motor Corporation that the Uber subsidiary Uber Technologies signed an agreement aimed at enlarging their existing partnership by advancing and launching a mobility service based on autonomous and shared vehicles.With this partnership the two groups brought together their knowledge and technologies in the creation of Toyota vehicles specially produced to be deployed in the Uber fleet.Toyota would thereby invest over 500 million dollars in the American company.It should be noted that this partnership was also seen by the two companies as important to the future opportunities offered by autonomous vehicles for which this technology needs to be developed.The challenge in this case is seen to be a way that these autonomous vehicles can be used by third party autonomous fleet operators through the signature of specific agreements.At present, the fleet of vehicles currently called Autono-MaaS will be based on the existing Toyota Sienna monospace platform which will integrate an Autonomous Driving System finely tuned by Uber with Toyota’s Guardian automatic security assistant.Toyota will also provide this project with its Mobility Services platform, its basic information infrastructure dedicated to smart vehicles.We look forward to seeing the launch of the pilot phase of this project on Uber’s Autoshare network which should begin in 2021.

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The factors in favour of a rise in the Uber share price:

We would now like to show you what strengths the Uber share has to support its upward trend.In order to understand this, it is necessary to determine the strengths of the company at the present time.We will now take a closer look at these strengths:

First of all, the solution implemented by the Uber Group has a very interesting evolutionary character.Firstly, the solution implemented by the Uber group is very interesting to evolve.This easy evolution of the services offered should indeed enable Uber to maximize the effectiveness of its international expansion.Taxi services are ubiquitous in every country in the world and the needs are therefore very real, enabling Uber to respond effectively by easily adapting its offer to the specific conditions and constraints of each country.

Uber's facilities in terms of managing its staff, i.e.its drivers, are also an advantage for the group, which can choose qualified drivers and does not have the same constraints as other companies.It should be remembered that Uber's system is based on self-employed and self-employed drivers, which also limits labour costs.Similarly, the group's operating costs are also very low with the absence of certain needs, since the interaction between drivers and customers is only done through the mobile application.

With regard to the group's business model, another undeniable advantage of Uber is the ability to offer an easy and clear service to users.In particular, users know the price of the race in advance and can order a vehicle at any time.

The value of this company is another advantage that you should take into account.Indeed, significant sums have been paid by investors in this company, which gives it the opportunity to develop more significantly and to expand its business around the world through investments in research and innovation in particular.

The policy of low fares compared to the offers of classic taxis is another of the strengths of the Uber model and allows it to easily win new customers.

Finally, account will also be taken of the Group's well thought-out strategy of diversifying its activities.Following the creation of Uber Eats in the field of meals-on-wheels delivery, it is likely that the group will soon set up other services of this kind, building on its know-how and efficient model.

The factors in favour of a drop in the Uber share price:

While the Uber group seems to have many assets that should enable it to grow and thus raise its share price on the stock market, it also has a number of shortcomings that we suggest you discover here in more detail thanks to the list of its current weak points.

First of all, the ethical issues surrounding Uber's relationship with its drivers remain at the heart of investors' concerns.Indeed, this business model based on the employment of self-employed rather than salaried employees has been the subject of much debate in recent years and although Uber has made real efforts in this direction, it is not impossible that new social movements will disrupt its activity in the years to come.

Similarly, there is no real link and loyalty programme between Uber and its passenger customers, which could lead to their flight to a potential competitor and in particular to competitors with lower prices or higher quality services.

Laws and regulations in the markets in which the Uber group operates may hinder its growth because of the constraints they impose.These rules differ from one country to another and Uber is obliged to adapt to them as best it can.

Account will also be taken of the arrival on the market of new competitors to Uber, which no longer enjoys a monopoly in this sector of activity.The low barriers to entry make it easy for new players to enter the market, which of course limits Uber's growth opportunities.

Finally, and despite operations aimed at simplifying this problem, such as the partnership with BNP Paribas bank that we presented to you above, the fact that Uber drivers have to finance the purchase of their vehicles themselves may prove to be a major obstacle to the strong development of this business.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What are the different major shareholders of the Uber group?

Among the current large shareholders of the Uber Group we find the following:  The SB Investment Advisers Group with 26.1%, Benchmark Capital Management which holds 8.83%, Public Investment Fund with 8.57%, Travis Kalanick that holds 5.78%, Expa Capital with 4.80%, TPG Group Holdings with 4.29%, GV Management that holds 4.18%, Goldman Sachs Asset Management with 3.51%, Dragoneer Investment Group with 2.50% and Lowercase Capital that holds 2.47%.

When was Uber introduced onto the stock markets?

It was in May 2019 that the Uber Group made a partial IPO through which it managed to raise 8.1 billion dollars with a total capital of 82 billion dollars. This in fact is one of the top ten largest IPOs in the United States even though its value turned out to be less than the amount foreseen  which was for around 90 billion dollars.

How has Uber optimised its taxation model?

The advanced tax model developed by Uber has been criticised by journalists that have publicised the fact that the company uses complex financial arrangements that are international in a manner of speaking, but notably through the Netherlands. These arrangements are particularly destined to reduce the amount of tax paid by Uber that still respect the taxation laws of the different countries where this company exercises its activities.  These arrangements are therefore entirely legal.

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