The entire concept of wealthy ride share companies should be alarming on its face.
Uber, Lyft and others are nothing more than middle men who happen to own a fairly powerful piece of online real estate that allows less-than-wealthy Americans to turn their personal vehicles into second, or maybe even third jobs. The vehicle wear and tear, traffic liability, and awkward interactions are far removed from these sultans of Silicon Valley, who simply reap the rewards of their vastly underpaid drivers.
These rideshare companies do only one thing well: Spread the meager wealth of the middle class up among itself, while taking a lion’s share of the transactional coin for themselves.
On paper, it’s an ugly reality of corporate greed come to life, and we have to remember that it behooves Uber and Lyft to keep their drivers from making any real money. Because, if these drivers were paid well, they would work less hours in their cars, and make Uber less money.
That’s why, as Uber and Lyft prepared to go public on the stock market, driver strikes were planned to call attention to the plight of these “independent contractors”.
The consequences were dire.
Uber is not having the uberprofitable day it was hoping for.
The ride-hailing company set its IPO at $45 per share on Thursday night, but ended up selling at $42 as soon as the market opened on Friday morning. Shares soon fell even lower to $41.06, nearly recovered to their original asking price by mid-day, and dropped once again to point Uber toward one of the worst first-day IPO performances of the decade.
Forecasts originally predicted Uber would price itself at $46-$48 per share, though its eventual decision of $45 per share with an $81 billion IPO was still massive. Still, the company never actually saw that set price materialize, and only peaked at $44.74 around 1 p.m. Uber’s immediate 6 percent fall after the floor opened makes it one of just 60 companies who’ve seen a debut day loss of 5 percent or more in the past 10 years, Bloomberg notes. And there’s a strong chance it could become the eighth of those companies to actually end up in the red for its first day.
Did the rideshare bubble burst, or have investors realized that we’ve been staring at a house of cards this entire time?
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