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Term Sheet — Friday, May 10

May 10, 2019, 1:41 PM UTC


Uber CEO Dara Khosrowshahi rang the bell this morning in a historic IPO for the tech world. After a decade, the ride-hailing giant is finally making its debut on the public markets.

Uber priced its IPO at $45 a share, and it will begin trading on the NYSE today. That brings the company’s estimated valuation to nearly $82 billion, making it one of the most valuable companies to ever go public.

We spoke with early Uber investor Bradley Tusk, who runs Tusk Ventures, a political consultancy and venture firm that works with startups facing regulatory hurdles. In 2011, he struck a deal with then-Uber CEO Travis Kalanick and offered his political advisory services in exchange for equity in the company. His shares (he sold half as part of SoftBank’s tender offer) are believed to be worth $100 million.

TERM SHEET: What are some of the regulatory hurdles that Uber faces today?

TUSK: First, there’s the worker classification issue, which is not a one-size-fits-all issue. There are markets where people are clearly full-time drivers, and it’s understandable they want to be treated as such. I think we need a model that’s flexible enough to recognize what people are doing, understands that not everyone is exactly the same, and treats them accordingly.

Second, Uber has to consider whether it wants to expand its own scooter work or move forward with a purchase of one of the two big scooter companies. Scooters are legal in some markets and illegal in others, so it’s still a process of legalizing it everywhere.

Three, it’s about autonomous vehicles. There are some bills in different states, but there’s no federal policy whatsoever. If Uber really wants to play in the autonomous space, it’s going to need to be involved in shaping the regulatory framework on a federal and local level.

As Uber innovates, it’ll run into issues no one’s ever had to face before.

Are you in touch with Uber co-founder Travis Kalanick today? Do you have any sense of how he feels about the IPO? [TS Note: Kalanick was in attendance at the NYSE, but he did not participate in ringing the bell.]

Yes, I’m in touch with him. I think it’s petty to take someone who took this thing from zero to one and created the entire concept of ride-sharing and try to erase him from history. To me, that’s pretty petty.

How confident are you in current Uber CEO Dara Khosrowshahi leading Uber into the future?

Dara’s a really, really good public company CEO. He proved that with Expedia. At Uber, he succeeded in a few key places — he did a really good job taking down some of the temperature, changing some of the culture, and improving the company’s reputation a little bit.

We’ve also seen growth in things like Uber Freight and Uber Eats, so obviously that’s important. He’s good at being a good public company CEO. When people like Evan Spiegel or Mark Zuckerberg go from startup founder to public company CEO, there’s a learning curve where they make mistakes. Dara will make fewer mistakes because he’s been through this before. Even though Uber’s a public company now, he’ll have to focus just as relentlessly on innovation as Travis did for Uber to reach its potential.

Will Uber and its ride-hailing counterparts ever be profitable?

Yes. I don’t know if it’ll be because of autonomous vehicles where they won’t have the driver anymore or it’ll be because the economics of this type of growth just don’t work anymore in the public markets and therefore the model will have to change.

Where do you expect Uber to invest the heaviest?

You’ll see a lot of focus on Uber Eats and Uber Freight because those verticals keep growing and growing. I would not be surprised if Uber begins creating other revenue streams like more old-school things. For example, government clients — school buses — to try and bring in some things that are more predictable. I have no knowledge of this, but could talks to buy one of the scooter companies be revived? Sure.

How do you feel about Uber’s IPO after watching the company for eight years?

The whole eight-year ride has been an emotional roller coaster. It’s the culmination of so many problems, so much opportunity, and so much success. Uber was just so much in every way — good and bad. I bet that anyone who has been involved since the early days has a lot of mixed emotions right now. I mean, I built my entire business and my whole fund off the work I did with this one company.

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Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.