Lyft filed IPO documents with the Securities and Exchange Commission Friday, beating its primary rival Uber in the race to end up being the first app-based ride-hail business to go public.
The company, which got its start as a college carpooling service called Zimride in 2007, states it has actually attained 39 percent market share in the United States since December 2018, up from 22 percent in December2016 This new development originates from brand-new riders and drivers, as well as more regular flights from existing users. For the quarter ended December 31, 2018, Lyft says it had 18.6 million “Active Riders” and over 1.1 million motorists.
Lyft has actually been aggressively courting riders by greatly discounting its fares in the run-up to its IPO, according to recent reports This comes at enormous cost to the company, and these documents supply the first glimpse of Lyft’s rapidly-growing-but-ultimately money-losing business. The company made $2.2 billion in profits in 2018 by supplying more than 1 billion rides. Lyft also lost $9113 million in 2018– its most significant annual loss in the past three years. For 2016 and 2017, its losses were $6828 million and $6883 million, respectively.
” We are laser-focused on changing transport and continue to lead the market in development,” Lyft states at the beginning of its the S-1 document required by the SEC for public companies that are based in the US. “We have developed a scaled network of chauffeurs and riders, or users, brought together by our robust innovation platform that powers countless trips and connections every day.”
Lyft is also supposedly planning to provide a few of its drivers money perks with the intent that those drivers would then have the ability to utilize the cash to purchase stock. It’s a complicated workaround to a distinct issue dealing with the ride-sharing business, which can’t give stock to their drivers due to SEC rules that avoid giving private company stock shares to freelancers.
In spite of releasing before Uber, Lyft has actually always been overshadowed by its much larger competitor. However that permitted the company to place itself as the scrappy underdog, which paid off when Uber suffered a series of self-inflicted scandals in2017 Management upheaval, allegations of business espionage, and revelations of sexual harassment sent out Uber into a public relations sinkhole. On the other hand, Lyft seized the chance to hire disillusioned chauffeurs and riders. It upgraded its app, stepped up marketing efforts to bring in more riders and broadened its US-only service into 160 more cities for a total of about 350.
Lyft is also taking on Uber to end up being a one-stop shop for a variety of transport modes, including bikes, scooters, and public transportation. In December, Lyft bought Motivate, the company that runs Citi Bike in New York City. Like Uber, Lyft is also running its own electric-scooter program.
Both business claim to wish to end personal car ownership. But more than Uber, Lyft fancies itself a think tank with big concepts about the future. The company’s co-founders, John Zimmer and Logan Green, have released policy documents forecasting the end of personal car ownership in major cities by 2025, and calling for more individuals to carpool by charging a charge to those who don’t.
Lyft just operates in the US and Canada, while Uber has a presence in Europe, India, and Latin America. Lyft also does not have a massive, growing food-delivery business like Uber. As it embarks on its roadshow to satisfy and pitch financiers, Lyft will likely field questions about those spaces.
Going public prior to Uber is definitely a victory, but one that features its own risks. In its filing, Lyft states these threats consist of intense competition from Uber and an unpredictable market. The list goes on to include self-governing technology, developing guidelines, and direct exposure to liabilities from incorrect activities by riders.
Financiers will be looking for any insight on possible regulatory hold-ups as well as legislation that might require Lyft to classify its chauffeurs as staff members. Last month, Lyft took legal action against the city of New York to obstruct a new law increasing the minimum wage for motorists.
The company’s governance structure might likewise come under examination. Last month, Zimmer and Green were supposedly preparing to take a near-majority control of the business in spite of together owning a stake of less than 10 percent. That quantity appears to still be up in the air: the filing revealed today does not indicate the percentage of stock both intend on taking.