3 Ways Uber’s Potential IPO Could Impact CRE
In February, reports from CNBC surfaced that Uber was making moves to prepare for an IPO next year. Lyft, Uber’s main competitor in the U.S. is also laying the groundwork necessary for going public attracting $1 billion from Google’s parent company. At first blush, this news may not seem relevant to CRE, but its impact could be felt in three important ways.
#1: Force Public Rideshare into Wider Use
Already, consumers living in closer quarters than in previous decades are demanding more walkable spaces. Instead of owning cars, they are taking advantage of public ride sharing companies like Uber and Lyft.
News that both companies are competing for capital in order to be the first to issue an IPO is going to push investors to make these companies profitable. That means supporting moves in CRE that are replacing parking lots with Uber and Lyft rides to and from the office.
#2: Increase Competition from Foreign Investors
The move that speculators point to as signaling Uber’s positioning to release its first IPO is its sell of their Asian transportation service, Didi. Similar moves by Lyft and their Asian subsidiary Grab are increasing the competition from foreign investors and public rideshare services. Last year Uber lost over $4 billion while Grab captured 95% of its market share.
#3: Spur Self-Driving Technology
One way that Uber and Lyft can broaden their use is through self-driving technology. Backers spending billions of dollars to support these companies and their visions for a thriving future for the public rideshare industry are banking on a self-driving future.
Already there are hotels and offices experimenting with Lyft and Uber as a means to shuttle patrons and employees to and from their campuses. Soon, companies like Lyft hope to utilize their partnership with tech companies in the Silicon Valley to dominate the self-driving space and therefore, the public ride share market.
For CRE these changes signal a continuing trend toward less parking and more creative ways of using space to cater to changing lifestyles. Whether office or residential, investor dollars show that there is a lot of confidence in the staying power of public ridesharing companies.
In order for these companies to succeed, they must gain in their widespread use. Right now the majority of Uber and Lyft users and drivers are concentrated in the cities. It has yet to become as standard as Yellow Cab has been in cities large and small across the country.
The recent news about Uber’s potential IPO coupled with Lyft’s means that CRE pros would be wise to keep an eye on trends in building design that use less space for parking lots and more space for autonomous vehicles and Lyft or Uber services.