I’m guessing Michael Grimes makes more money than most of us. He’s a technology banker at Morgan Stanley, meaning he works with some of the most highly valued companies around and probably sees a fat multimillion-dollar salary. Despite this, Grimes still reportedly spent years driving an Uber car–not because he needed more money, but because he wanted a leg up on the other banking competition who are vying to help take the company public.
According to the Wall Street Journal, this is just one thing bankers have done to grab the attention of prospective customers. This long game Grimes reportedly played may pay off royally. If Uber chooses Morgan Stanley as its top underwriter, the bank will stand to make millions of dollars in fees. In essence, if his alleged ploy works, Grimes may get the biggest bonus any Uber driver ever did see.
As both Lyft and Uber reportedly prepare to go public, it’s the banks who will reap the benefits. Both companies have large valuations, and both continue to raise more and more money given that the businesses are generally not profitable. And banks know they are in the position to benefit. So it’s unsurprising that Morgan Stanley and Goldman Sachs are reportedly in a war to woo Uber–and that Grimes had the foresight to drive for the company to prove his worth.
The real question remains: After these businesses go public, how will they fare? While an IPO will raise money to keep them afloat and continuing to scale, how long will it take until investors see real profits?
For now, the real race is with the banks. And you can read the full story about that here.