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Lyft races ahead of Uber to Wall Street listing
SAN FRANCISCO, March 2, 2019 (BSS/AFP) – Lyft filed documents Friday for
its stock offering, racing ahead of ride-sharing rival Uber for a Wall Street
listing that sets the stage for a series of big venture-backed tech firms to
hit public markets.
The initial public offering (IPO) filing offered the first glimpse of
Lyft’s finances and showed the San Francisco firm lost $911 million on $2.2
billion in 2018 revenues.
The documents show revenues grew sharply from $343 million in 2016, but
losses widened as well.
Lyft’s private valuation has been estimated at $15 billion, considerably
smaller than Uber but making it one of the largest startups worth more than
$1 billion, popularly known as “unicorns.”
It will trade on the Nasdaq under the symbol LYFT and, according to some
reports, will seek a valuation of more than $20 billion.
“We are laser-focused on revolutionizing transportation and continue to
lead the market in innovation,” Lyft said in its filing, setting a
preliminary target of raising $100 million, a “placeholder” figure likely to
be revised higher.
The company has discussed the possibility of expanding globally but so far
has operated only in the US and Canada.
The filing with the Securities and Exchange Commission said only that Lyft
“may continue” to expand its international operations, without offering
specifics.
Lyft added that its future plans are “multimodal,” and involve using
shared bikes and scooters for shorter rides, while enabling users to see
transit options on its mobile application.
The date and pricing of the offering were not announced.
– One billion rides –
The document said Lyft had completed over one billion rides since its
inception in 2012 and had bookings last year of $8.1 billion.
It has a 39 percent share of the US rideshare market, according to a
survey cited in the filing.
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Lyft’s mission, according to the statement, revolves around reducing the
number of cars on roads, and includes a path toward self-driving vehicles.
“We believe that cities should be built for people, not cars,” the company
said. “Mass car ownership strains our cities and reduces the very freedom
that cars once provided.”
Lyft said it is also investing in autonomous technology and hopes to roll
out more self-driving vehicles, calling this “a critical part of the future
of transportation.”
“We were the first to launch a publicly-available commercial autonomous
offering in the United States,” the company said.
Both Lyft and Uber have faced criticism for disrupting traditional taxi
services and for using the model of drivers as independent contractors.
The rideshare firms claim that most drivers prefer the flexible work
arrangement, even if it offers fewer benefits and less job security.
Lyft said it will seek to maintain its policy that drivers are independent
contractors while noting that any legal challenge to this could have
“adverse” consequences.
For the IPO, Lyft said some shares would be reserved for drivers who have
completed at least 10,000 trips using the platform.
The company will offer a bonus of $1,000 to $10,000 to eligible drivers by
March 19 that may be used to buy shares at the offering price, although they
may opt to pocket the cash.
– ‘Sharing economy’ advances –
Lyft’s IPO is the first of the so-called “sharing economy” startups which
have been transforming some industries, with listings expected this year from
the other giants in the field, Uber and Airbnb.
Arun Sundararajan, a New York University professor who specializes in the
sharing economy, said this is just the start of a process that could
transform a number of industries.
While the trend has started in sectors such as logistics and lodging,
Sundararajan said he expects “we’ll see large platforms for professional
services for certain kinds of health care, perhaps alternative energy.”
“I think this is just the beginning,” he told AFP.
As these sectors transform labor markets, a key question is what happens
to social protections enshrined in employment, Sundararajan said.
He said he expects a “challenging transition” in the coming decades,
adding: “We constructed the social safety net over the 20th century but we
just did it for full-time work. We need to refashion that safety net.”
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