Why Silicon Valley Loved Uber More Than Everyone Else

Uber was the most valuable private company in history, but the public market has not been as enthusiastic. The reason why explains a lot about how the tech industry works.

Photo: Spencer Platt/Getty Images

Uber is now a massive, publicly traded company. Anyone can buy Uber shares at a valuation of about $70 billion. This isn’t bad for a company losing billions of dollars a year, but it’s a fraction of the $120-billion valuation the IPO’s bankers initially floated. It’s roughly what private investors valued it at 3 years ago, when the company made $7.43 billion less revenue.

That is to say, there’s a large gulf between how venture capitalists saw the company and how a broader set of investors on the public market see it. Journalists and analysts have tried to explain this yawning gap. Maybe it’s because Uber stayed private too long, or because Lyft messed up ride-hailing IPOs, or because the timing was bad, or because the long shadow of corporate misbehavior has tarnished the brand. With $50 billion on the table, there’s plenty of blame to spread around.

But some of it should go to Silicon Valley’s cultural divergence from the business reality. Investors loved the company not as an operating unit, but as an idea about how…