Lyft races ahead of Uber to Wall Street listing
San Francisco company, which has a 39% share of the US ride-share market, is expected to seek a valuation of more than $20bn
San Francisco — Lyft filed documents on 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 $911m on $2.2bn in 2018 revenues.
The documents show revenues grew sharply from $343m in 2016, but losses widened as well.
Lyft’s private valuation has been estimated at $15bn, considerably smaller than Uber but making it one of the largest start-ups worth more than $1bn, 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 $20bn.
“We are laser-focused on revolutionising transportation and continue to lead the market in innovation,” Lyft said in its filing, setting a preliminary target of raising $100m, 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.
The document said Lyft had completed more than 1-billion rides since its inception in 2012 and had bookings in 2018 of $8.1bn.
It has a 39% share of the US rideshare market, according to a survey cited in the filing.
Lyft’s mission, according to the statement, revolves around reducing the number of cars on roads, and includes a path towards 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 US,” 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-$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.
Lyft’s IPO is the first of the so-called sharing economy, start-ups 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 specialises 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 said .
As these sectors transform labour 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.”