How to Buy Uber Stock in 2021
Have you considered investing in one of the most popular disruptive firms? If you have, you should read the following sections they cover a complete guide to investing in this company. It'll help you understand Uber's business model, history, revenue streams, and growth potential. It also provides specific investing tips and the necessary steps to get started with your investment.
Learn How to Buy Uber Stocks in 3 Easy Steps
Find a Broker
The first thing you need to do is find a well-regulated online broker. This is an intermediary firm that will facilitate your transactions. These will take place on the broker’s platform, where you will be able to buy Uber shares, along with numerous other financial assets.
Analyse Uber’s Chart
There are many online brokers offering a plethora of services, benefits, and investment analysis tools, so you need to choose the right one for your needs. After opening your brokerage account, you'll find the right tools to analyse Uber's stock price and develop a strategy for trading it. In other words, you can find out whether Uber suits your investment profile or not.
Once you open your account and check Uber’s history and indicators, you can finally start trading. Make sure your account is fully funded before your first transaction. Brokers will charge you different fees and commissions for their services, so read about these before making a transaction. You can now trade Uber shares and other financial assets.
Uber Company Overview
As with the rest of the companies in your portfolio, you should know the basics of Uber, how it operates, and how it generates revenues, among others. Uber Technologies is an American tech company known for its ride hailing services that disrupted the taxi industry, but there is so much more to it! Check out the next sections to find out in which industries it operates, how it generates revenues, and other crucial information that helps you make a decision.
Uber Business Model and Revenue Streams
The company’s main business, which is its personal transportation service that allows users to order a taxi ride from their mobile devices, generates revenue by taking a cut from passenger fares. It has also expanded in several other business segments, namely food delivery, freight, road transportation, navigation, and payment processing solutions. Uber’s operations span across different countries, including the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.
In recent years, its food delivery service has experienced tremendous growth and has become the primary driver of revenue for the company. This is because Uber earns both the delivery charges paid by the customer and the restaurant's commission for each order.
Its freight and shipping business launched in 2017 is also gaining traction. This business segment operates under the same scheme as its flagship service wherein Uber's application connects people with freight shippers and shares a portion of revenue with carriers.
The last segment, Advanced Technology Group, albeit small, is what some believe to be the key to Uber's profitability. This segment focuses on developing autonomous vehicles and ride-sharing technology, reducing Uber's costs significantly upon its eventual rollout.
History of Uber
Uber was founded in 2009 based on the idea of requesting a taxi ride straight from a mobile phone. Its founders were StumbleUpon co-founder Garrett Camp and Red Swoosh founder Travis Kalanick. Under the name UberCab, the company went live in San Francisco in 2010, offering on-demand car service.
By 2011, Uber expanded in other major cities, such as Chicago and New York. It also ventured into the international scene by setting up operations in France. A year later, Uber introduced UberX, which ultimately became the platform for drivers to enlist their personal vehicles and become an Uber partner.
In mid-2014, Uber made its entrance to China by making an official launch in Beijing but was later acquired in 2016 by China’s dominant player in the ride-sharing business, Didi Chuxing. Uber also introduced UberPool in 2014, which allowed users to share rides based on proximity, and UberFresh, which became UberEats in 2015.
In June 2017, the company was investigated for its work culture enforced by then-CEO Travis Kalanick, who resigned a few weeks later. In 2019, the company went public and raised $8.1 billion at its IPO price of $45 a share. In 2020, the company's net loss amounted to $6.7 billion, which was a slight improvement compared to the $8.5 billion lost in 2019.
Brokers That Offer Uber Shares
We have listed our top choices of brokers that offer Uber stocks. We believe that these companies provide the best tools and support that will help you trade not just Uber stocks but a whole range of other assets.
Should I Invest in Uber Stock?
The main reason for buying Uber stocks is it is a stock with high growth potential. Despite its long-standing struggle for profitability, many believe it's still a business that offers long-term value. This is due to the services it offers that have become essential to society, such as convenience, affordable rides, and a new way of earning money for vehicle owners.
Uber Stock Investment Potential
A large part of Uber's unprofitability issue is related to its high variable costs. The food delivery business, for instance, loses money per transaction because it pays more to the driver than what it charges the customer. This is no different from its ride-hailing business.
The company, however, has the option to charge customers more, but they'd risk losing market share if they do -- especially with the industry's intense competition. So, perhaps the only path to profitability is a gradual reduction of costs, which some believe possible in the future, mostly as the company plans to roll out autonomous vehicles.
That might not happen in the short term, and many investors may not have the appetite to wait. Still, considering how Uber traded in the past year amid a spike in its food deliveries, even a hint of breaking even could further boost its stock price.
What Kinds of Investors Should Include Uber in Their Portfolios?
Investors should be willing to overlook the company's lack of a healthy bottom line and focus more on its long-term outlook. Uber is still the clear leader in food deliveries and ride-hailing.
The company does not focus only on ride-sharing; instead, it wants to dominate the entire transportation industry. Ube is already in the taxi and scooter scene and is currently focusing on Uber subway, an Uber flying vehicle, and possibly any other means of transportation.
Essentially, Uber is becoming more like a marketplace, which resembles Amazon's business model. If Uber manages to address its long-standing tussle regarding unprofitability, investors who yearn for growth could find it easily by investing in Uber's stock.
How Much Should I Invest in Uber
If you have decided to invest in Uber at this point, then the next important decision is how much money to invest in this innovative company. Generally, this is about your objectives and your acceptance of risk. Therefore, the investment amount should take into account all these details, including your investment timeframe and return aims.
How to Buy Shares in Uber Stock?
The steps you need to take to buy your first Uber shares are straightforward, and it all starts with getting your brokerage account approved. However, you should also know about the Direct Stock Purchase Plan, a method that does not require a brokerage account. Let’s find out more about both of them.
Buy Uber Shares Using a Broker
As mentioned, you need a brokerage account to buy or sell Uber shares. A trading account with an online broker is the best choice for convenience and cost-effectiveness.
You need to fill in an online application form and then submit certain documents such as your passport, driver's license, or social security to verify your identity. These would all be necessary before getting your account approved.
Once it’s ready, you can proceed to deposit your initial capital with the available funding methods. You may then see your funds in your account within minutes, but in some cases, it could take days, especially if the chosen deposit method is a wire transfer.
After everything is set and your account is funded, you can finally place a transaction. If you need more information about the company, your broker's platform has the analytical tools, reports, and other pertinent data about each company to help you evaluate your investments.
Buy Uber Shares With a Direct Stock Purchase Plan (DSPP)
Investing through a Direct Investment Plan would allow you to buy a company’s shares without a brokerage firm. You would need to connect with the company's transfer agent to know more about the costs of opening an account, minimum initial deposit, and minimum monthly deposit. However, as of this writing, Uber does not offer a DSPP.
Frequently Asked Questions
Uber's stock rallied for much of last year due to an uptick in food deliveries as most people stayed indoors. This trend may likely continue in 2021 and beyond as many people are likely to decrease social interaction and adopt a more convenient lifestyle.
As of late, Uber is not profitable, and it may take a while for it to get there. However, if you are interested in a company with growth potential, Uber should be on top of your list, thanks to its continuous expansion and innovation.
Yes, thanks to Uber’s daily volatility. This means that traders looking to gain profits off of short-term fluctuations can indeed find opportunities trading Uber. At the same time, the company may be an excellent addition to a long-term investment portfolio, especially if you believe in its ability to expand further and innovate.
The best platform to trade Uber depends on your experience as an investor. You should choose a platform that suits your analysis abilities, so you can understand the charts and investment tools provided by your broker.
Uber can be traded from 9:30 A.M. to 4 P.M. (ET), from Monday to Friday.
Uber is listed on the New York Stock Exchange (NYSE) under the symbol UBER.