Uber’s taxi market is not enough

Uber’s decision to carve out its self-driving unit and sell a minority stake to investors including SoftBank’s Vision Fund and Toyota suggests the group is teeing up an initial public offeringany day now. Why else put a valuation of up to $10 billion on robotaxis — one of the costliest segments of the business. Both investors have an existing interest in Uber. SoftBank bought a 15 per cent stake in 2017, mostly by buying out shareholders at a $48 billion valuation. Last summer Toyota agreed to invest $500 million as part of a deal to work on self-driving cars… that valued Uber at about $70 billion. Uber needs to explain why its disparate businesses are now worth a combined $100 billion or more… But the global taxi market alone is not enough. It is competitive and easy to replicate… This is why it is investing in bikes,scooters, food delivery and self-driving cars. Autonomous passenger vehicles have been called a $7 trillion market but that is a far-off goal… Uber is trying to present a sober business model ahead of its IPO. Help with funding of autonomous vehicle development plays to that image. So does putting a number on it. Any calculation of Uber’s value that involves multiples of expected revenue are unlikely to include contributions from autonomous cars. Sticking on a price tag now is a neat way to explain their part in the eventual total.