SoftBank, Toyota in talks to invest $1B in Uber's self-driving unit

Uber driverless car heads out for a test drive in San Francisco

Uber driverless car heads out for a test drive in San Francisco

Selling a piece of the self-driving business would allow Uber to offload part of a very expensive endeavour, as it faces scrutiny from prospective investors in an initial public offering planned for the coming months.

But the close proximity of the two IPOs could test the public market's appetite for ride-sharing investments. Reuters said some analysts expect its market cap to be closer to $100 billion based on the company's recent financials. Both have also moved quite swiftly to go public given they both filed confidential paperwork for an IPO in December 2018.

Lyft seeks a valuation of United States dollars 20 to 25 billion, having been valued at USD 15 billion as a private company.

Both companies stand to benefit from Lyft joining the public markets first.

Dara Khosrowshahi, Uber's chief executive officer, ordered the San Francisco-based company to take the cars off the road for much of a year ago. But the company lost $US3.3 billion, excluding gains from the sale of its overseas business units in Russian Federation and Southeast Asia.

Since Uber still has weeks of preparation before releasing third IPO, Lyft has a great shot at issuing Lyft IPO before Uber gets a chance to do so, which will help the company avoid being overshadowed by Uber that undoubtedly has more operational force in oppose to Lyft.

Accepting a minority investment would let others cover the cash needs in the short term, although that US$1 billion won't last long. The company lost $911 million.

Uber's business operates in more than 70 countries and includes not only ride-hailing but also bike and scooter rentals, freight hauling, food delivery and an expensive self-driving vehicle division.

The Japanese holding conglomerate's SoftBank Vision Fund has been known to support Silicon Valley ventures, with its latest being a $1 billion investment in Uber's self-driving subsidiary ahead of its upcoming IPO, The Wall Street Journal reported.

Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.