Uber is different from Lyft, Saudi Arabia's PIF says before the IPO


Uber can not be compared to Lyft because its business is spread around the world and has more services to offer, according to Saudi Arabia's sovereign wealth fund.

Saudi Arabia's Public Investment Fund (PIF) is one of the largest shareholders of the giant automaker, with an approximately 4% stake, according to a regulatory document. This stake is estimated at about US $ 3.4 billion, when Uber opens its capital this month.

"Uber is totally different from Lyft," Yasir Othman Al-Rumayyan, PIF director, told CNBC's Hadley Gamble on Tuesday. "Of course it's a hitch-hanger, but it's a hitch-hanger company not just in the US, but around the world."

Although Lyft has gained significant market share in the U.S. mobility space, Uber's strategy has been to expand its platform internationally. The company currently operates in 63 countries and in more than 700 cities, while Lyft operates only in the US and Canada.

Close-up of vertical sign with logos for touring companies-hailing Uber and Lyft.

Smith Collection | Cattle | Getty Images

Uber is also offering investors as a single point of transportation, with a portfolio of different segments, such as electric scooters and bicycles, stand-alone cars, logistics and food delivery. Lyft can only score two of these boxes – scooter and bike sharing and self-driving.

Uber "has market share in the US and has market share worldwide and is bringing some new services," said Al-Rumayyan.

Al-Rumayyan's comments come amid concerns that Uber may face the same fate as Lyft once it debuts its actions. Since its IPO at the end of March, Lyft's shares have lost more than 20% due to concerns about a lack of profitability.

Uber could face valuation comparisons in this regard, as it is still to generate profit, and also warned that it may never become profitable. It earned $ 11.3 billion last year, at the same time it posted a loss of $ 1.8 billion.

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However, the company's dominance in the mobility market seems to be unmatched. Although it has been withdrawn from major markets, such as China and Southeast Asia, it still has equity holdings in the companies it sold there. And more recently, it bought the giant Careem from the Middle East for $ 3.1 billion.

"Uber and Careem will be considered local companies in Saudi Arabia and the Middle East," Al-Rumayyan said. "The number of jobs that Uber has brought to Saudi individuals – I think over 100,000 jobs – which is something really great and that's why people like the idea of ​​sharing hitchhiker and Uber."

Uber in 2016 said his goal was to create "economic opportunities" for more than 100,000 Saudi drivers in five years.

The company is seeking to raise up to $ 9 billion in its IPO, an offer that can add value to the company by up to $ 91.5 billion. Still, this rating tag is actually lower than previously reported estimates of a $ 120 billion market value.

Saudi Arabia's PIF, which has $ 300 billion in assets under management, is also an anchor investor of the $ 100 billion Vision Fund, $ 45 billion by SoftBank. The Japanese group is currently the largest shareholder of Uber, with almost 13% stake in the company.

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