IPOs

Lyft Gets Head Start on Uber With IPO Filing

Lyft's offering could be a bellwether for how a number of tech unicorns including arch-rival Uber are received by investors this year.
Matthew HellerMarch 4, 2019
Lyft Gets Head Start on Uber With IPO Filing

Lyft has filed paperwork for an initial public offering, promising to take investors on a ride to a transportation “revolution” but raising doubts about its ability to make a profit.

Lyft’s filing of a prospectus gives it a head start on arch-rival Uber in the ride-sharing companies’ race to go public.

A Better Way to Do Ecommerce

A Better Way to Do Ecommerce

Learn how Precision Medical leveraged OneWorld to cut the cost of billing in half and added $2.5M in annual revenue.

“We are one of only two companies that have established a TaaS [transportation as a service] network at scale across the United States,” Lyft said. “This scale positions us to be a leader in the continued transportation revolution.”

According to the prospectus, Lyft’s share of the U.S. ride-hailing market jumped from 22% at the end of 2016 to 39% in December 2018. The company doubled its net revenue in 2018 to $2.2 billion but its net loss widened to $911 million from $687 million and $683 million in 2017 and 2016, respectively.

“We have a history of net losses and we may not be able to achieve or maintain profitability in the future,” the prospectus said.

As CNN reports, a number of tech unicorns are expected to go public this year and “Lyft’s public market debut could prove to be a bellwether for how these companies will be received by investors. In particular, Lyft will almost certainly be viewed as a proxy for what to expect from its chief rival Uber, a much larger business.”

Founded in 2007, Lyft has presented itself as a genial alternative to Uber. Both companies have been investing in self-driving cars, electric scooters and bikes.

“We believe that the world is at the beginning of a shift away from car ownership to transportation-as-a-service,” Lyft said. “Lyft is at the forefront of this massive societal change.”

But the investments have been crimping Lyft’s bottom line, with total costs and expenses increasing 77% to $3.1 billion in 2018. The company’s cash and cash equivalents had shrunk to $518 million as of Dec. 31, 2018 from $1.1 billion a year earlier.

“It seems safe to say its current rate of spending is not sustainable, and that profitability remains a long way off,” Quartz said.