NEW YORK - With a ring of the opening bell, Uber began picking up passengers as a newly minted public company Friday and investors waited to bet on a service with huge potential, but a long way from turning a profit.
Shares in the ride-hailing giant were sold in an initial public offering for $45 each, raising $8.1 billion, but it will take several hours for new investors to show how much they're interested. Officials expect trading to start around 11:30 a.m.
CEO Dara Khosrowshahi and other company officials stood on a balcony above the New York Stock Exchange and clapped as the bell rang to signal the start of the day's trading.
The IPO price on Thursday came in at the lower end of Uber's targeted price range of $44 to $50 per share. The caution may have been driven by escalating doubts about the ability of ride-hailing services to make money since Uber's main rival, Lyft, went public six weeks ago.
Jitters about an intensifying U.S. trade war with China have also contributed to the caution. Stocks opened broadly lower on Wall Street after the two countries failed to reach a deal before Friday's tariff deadline.
Even at the tamped-down price, Uber now has a market value of $82 billion — five times more than Lyft's.
Before the opening bell, Khosrowshahi tried to manage expectations for the first day of trading.
“Today is only one day. I want this day to go great, but it's about what we build in the next three to five years,” he said in an interview with CNBC. “And I feel plenty of pressure to build over that time frame.”
Uber, Khosrowshahi said, is dealing with a potential $12 trillion market so “it makes sense to lean forward.”
He predicted that younger generations will not want to own cars. “I think more and more you're going to have transportation on demand services, essentially de-bundle the car. They're going to want to push a button and get the transportation they want.”
Austin Geidt, one of Uber's first employees, rang the opening bell. She joined the company nine years ago and is now head of strategy for the Advanced Technologies Group, working on autonomous vehicles. Over the years, she helped to lead its expansion in hundreds of new cities and countries.
Both Uber co-founders Travis Kalanick and Garrett Camp were present at the exchange but absent from the podium during the bell ringing.
A black Uber logo was hanging over exchange floor and bright green Uber Eats trucks were parked outside. Men in black T-shirts and hats with the Uber Eats logo handed out drinks and snacks on the trading floor while photos of sedans, helicopters and Jump bikes were shown on screens above.
No matter how Uber's stock swings Friday, the IPO has to be considered a triumph for the company most closely associated with an industry that has changed the way millions of people get around. That while also transforming the way millions of more people earn a living in the gig economy.
Uber's IPO raised another $8.1 billion as the company it tries to fend off Lyft in the U.S. and help cover the cost of giving rides to passengers at unprofitable prices. The San Francisco company already has lost about $9 billion since its inception and acknowledges it could still be years before it turns a profit.
That sobering reality is one reason that Uber fell short of reaching the $120 billion market value that many observers believed its IPO might attain.
Another factor working against Uber is the cold shoulder investors have been giving Lyft's stock after an initial run-up. Lyft's shares closed Thursday 23% below its April IPO price of $72.
Uber “clearly learned from its `little brother' Lyft, and the experience it has gone through,” Wedbush Securities analysts Ygal Arounian and Daniel Ives wrote late Thursday.
Despite all that, Uber's IPO is the biggest since Chinese e-commerce giant Alibaba Group debuted with a value of $167.6 billion in 2014.
“For the market to give you the value, you've either got to have a lot of profits or potential for huge growth,” said Sam Abuelsamid, principal analyst at Navigant Research.
Uber boasts growth galore. Its revenue last year surged 42% to $11.3 billion while its cars completed 5.2 billion trips around the world either giving rides to 91 million passengers or delivering food.
Uber might be even more popular if not for a series of revelations about unsavory behavior that sullied its image and resulted in the ouster of Kalanick as CEO nearly two years ago.