An Uber Interesting IPO
Uber filed for an Initial Public Offering (IPO) this Thursday. It’s a big deal, and highly anticipated by Silicon Valley and stock market observers.
So what’s an IPO? Basically, a company going from private to public by listing itself on the stock market (in this case the New York Stock Exchange). Once its on the stock market, anyone can invest by buying a share.
Uber did not list a target price, and it’s up to the market to decide how much they think an Uber stock should be worth. In August 2018, the Wall Street Journal reported the company’s value to be somewhere around $76 billion, meaning it’s most definitely a ‘unicorn’ – or a start-up valued over a billion bucks.
But just because Uber is a ‘unicorn’ doesn’t mean its easy coasting – they still have more than their fair share of controversies and competitors to keep things interesting. Their biggest ride-share competitor, Lyft Inc., also went public last month, opening at around $78 USD, but now hovering around $59 – not exactly an inspiring outcome, but it’s still early days.
Another interesting component of this IPO? Due to federal regulations, Uber had to disclose their private investors. As it turns out, Saudi Arabia owns (at the very least) a 5.2% stake in the company – confirming suspicions about the Kingdom’s ever-growing presence in Silicon Valley.
Between air strikes in Yemen and state sanctioned murders of journalists and activists, Saudi Arabia’s ‘brand’ isn’t exactly in tune with the holier-than-thou look Silicon Valley tends to go for.
Uber CEO Dara Khosrowshahi even publicly backed out of a conference organized by Saudi’s crown prince last year – so it’s
hypocritical interesting that his company doesn’t have a problem with taking Saudi Arabia’s money.
Google has Many (actual) Woes in the 6ix
Remember when Amazon threw in the towel on its plans to build a second headquarters in Queens, New York? It appears Alphabet’s Sidewalk Labs planned Toronto waterfront community may also be on thin ice.
As a refresher: Sidewalk Labs is the urban innovation wing of Alphabet, which is the parent company of Google. Sidewalk Labs is planning a $1 billion project to completely overhaul 12 acres along the Toronto waterfront into a high-tech neighbourhood with mixed-zoning. Highlights include: heated roads that can accommodate driverless cars, infrastructure that utilizes renewable energy, a commitment to building affordable housing units, and sensors to collect data about air quality and noise.
Sounds pretty good, right? Not so fast. In line with growing public skepticism about the role of large tech companies in protecting consumer data, some Toronto residents are concerned about whether Alphabet will utilize data collected from residents responsibly.
According to a report by Aria Bendix in Business Insider, certain community activist groups and anti-surveillance academics are organizing a formidable opposition to the project. According to the report; “By capturing the activity of residents through underground sensors, Sidewalk Labs would learn about certain daily movements and behaviors, like when a person is stopped at a traffic light or seated on a park bench. The company has pledged to make all of its public data anonymous, but it hasn’t agreed to keep its data local.
Sidewalk Labs believes that its Quayside data can be governed under Canadian law without exclusively residing in the country. This would allow companies — and particularly startups — outside Canada to use the data for their own competitive agendas.”
City councillors have also expressed concern about leaked documents that show Sidewalk Labs has proposed to fund a new Light-Rail Transit line in exchange for lower taxes and a cut of the revenue collected from developers. Similar to the tax breaks offered by NYC to Amazon, people aren’t too thrilled about the prospect of throwing big tech a financial bone.
The bottom line? The line between technology and urban life is becoming increasingly blurred –expect to hear more and more about these controversies in the future.
Ontario Budget Blues
Last week, Doug Ford dropped his first budget as Premier, a budget $4.9 billion higher than Wynne’s final fiscal blueprint announced last March (blame it on hydro). The $163.4 billion budget puts the current deficit at $11.7 billion, meaning that according to the PC’s, the books will be balanced in 5 years. The budget brings in a mixed bag of highlights- ranging from childcare tax credits, to tailgate parties, to new license plates.
Notably, Ford’s government intends to roll out a child care tax credit (CARE credit), which, depending on family income, would reimburse families up to 75 percent of their eligible childcare expenses, maxing out at $6000, while also dedicating $1 billion to creating new daycare spaces. Concurrently, the budget puts forward massive cuts to children’s and social services ($1 billion), which includes facilities in the youth justice system.
Another Ford focus is pushing forward more flexible alcohol and gambling regulations – by legalizing tailgate parties, changing rules about when and where alcohol can be sold, and making public drinking legal (yay for park beers!).
An additional $384 million is being put towards hospitals, with an overall increase in health spending over the next three years of 1.6 percent. The budget projects to save $350 million a year in the next few years by centralizing Ontario’s 20 health agencies. However, Ontario healthcare providers say these moves aren’t enough to account for inflation, nor to maintain staffing levels.
So what’s left out? The PC government is being sharply criticized for its cuts to Indigenous Affairs and legal aid. The ministry of Indigenous Affairs budget has been cut by 15 percent to $74.4 million, with no allotment for claim settlements.
The funding cuts to certain already underserved populations seems somewhat at odds with the Ontario slogan rebrand to a “Place to Grow”. In response to the budget, the Ford government stands by the fact they are committed to “protecting what matters most”.