Uber is testing an on-demand staffing business called Uber Works, according to the Financial Times. The service would make it possible for businesses to hire short-term workers for things like “events and corporate functions, such as waiters or security guards,” the report says. The company is trialing the service in Chicago after testing it in Los Angeles earlier this year.
While still in the early stages, the new business would likely not directly compete with more consumer-facing services like TaskRabbit. It’s also one of “several initiatives” that Uber’s “new modalities” division is exploring alongside things like electric scooters, and it might not turn into a full business, according to the report. A spokesman for Uber did not respond to comment.
Uber is floating lots of new ideas to increase its overall value
Uber Works could become another potential source of income for the millions of drivers who are contracted by Uber; they can already supplement or replace their driving by taking jobs with Uber Eats, the company’s on-demand food-delivery service. It could also provide a fresh angle for critics who claim the company misclassifies its drivers as independent contractors, denying them benefits like health insurance and minimum wage.
Wherever the idea goes, Uber Works is the latest result of the company’s push to diversify its business ahead of its plan to go public next year. Dara Khosrowshahi, Uber’s CEO, has said he hopes to make the initial public offering, or IPO, sometime in the second half of 2019.
After cooling its global expansion and licking its wounds in markets like China and Russia, Uber has spent the last few years developing new facets of its business on the path to that public offering. Most notable has been Uber Eats, which Khosrowshahi said in May generates $6 billion in total bookings per year across some 250 cities around the world. Some Wall Street banks have pegged the potential value of Uber Eats at $20 billion alone, which is about one-third of Uber’s total current valuation.
Just this week, Uber announced a new division of Uber Freight, its trucking division, called Powerloop. Where Uber Freight helps match truckers to companies that have goods that need to be moved, Powerloop is a service that will rent physical equipment — in this case, tractor trailers — to drivers in need for a daily fee.
Two of Wall Street’s biggest banks are in a heated battle to control Uber’s IPO
Uber has also been diversifying its core on-demand transportation offerings beyond car rides, too. The company added electric scooters and bikes to its ride-hailing app this year, and it’s eyeing more futuristic options like all-electric short-range aircraft, too. It also continues to work on self-driving technology, though its efforts there have slowed after one of the company’s test cars killed a pedestrian in Arizona earlier this year.
“These ad on businesses are why Uber gets a huge valuation,” Mike Ramsey, a transportation analyst at Gartner, tweeted earlier this week. “Amazon started with books. I’m not sure Uber can be Amazon, but the notion applies.”
That “huge valuation” currently stands at over $70 billion, but it could skyrocket to $120 billion during the planned public offering, which would be more than the big three automakers combined. For comparison, Lyft is also planning an IPO, but it’s expecting a more conservative $15 billion valuation.
Two of the biggest investment banks on Wall Street, Goldman Sachs and Morgan Stanley, are in a heated competition to take the lead on Uber’s offering, with the latter’s top banker reportedly having moonlighted as an Uber driver in order to gain an edge. Whichever bank wins the contract could net tens of millions of dollars in fees.