Markets

Lyft files for stock offering, beating Uber to Wall Street

Lyft files for stock offering, beating Uber to Wall Street”

Insiders, who on Friday filed to trade the company on Nasdaq, hope the listing will value the ride-hailing firm at as much as $25 billion - two-thirds more than its most recent private funding round.

The Wall Street Journal reports that in the event of an IPO, both companies will offer cash bonuses to drivers - or the option to use that cash toward company stock at its IPO price before it begins trading. "We have a history of net losses and we may not be able to achieve or maintain profitability in the future", it warns.

But Lyft's acquisition of bike-sharing company Motivate for $250.9 million past year is not expected to materially increase revenue in the short term. It was valued at $15 billion earlier past year.

Kochan told CNN Business that it's "clear" that both Uber and Lyft are anxious the drivers will use the IPO filings as "an opportunity raise their voices and ask how will this benefit them".

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The company said its revenue grew from $343.3 million in 2016 to $1.1 billion in 2017 and $2.2 billion in 2018, representing year-over-year growth rates of 209 per cent and 103 per cent respectively. If all goes smoothly, Lyft's stock market debut will likely occur in late March or early April.

The company claims to have 39 percent market share in the US, up from 22 percent in December 2016.

2018 has not been a good year for the company, as it has announced that its losses for the year will amount to more than $1 billion dollars.

This is a controversial share structure often adopted by tech companies and will see a concentration of voting power among the company's founders, Logan Green and John Zimmer.

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Both Uber and Lyft are now locked in a two-way battle for achieving market dominance in the ride-hailing segment of the US.

Uber is also unprofitable, and in 2018 lost US$1.8-billion before taxes, depreciation and other expenses.

Lyft had 30.7 million riders and 1.9 million drivers in 2018, racking up $8.1 billion in total bookings, the filing shows. Lyft already offers bike and scooter-sharing schemes. Banks have sketched out valuation scenarios for Uber as a public company that stretch as high as US$120 billion, people familiar with the matter have said.

The execs couldn't have given too many rides considering the average Lyft trip is about 6 miles or so, which in San Francisco is a trip from City Hall to Ocean Beach and costs about $20 bucks. Uber and Lyft have been subject to similar attacks on their business model, which classifies drivers as contractors and not employees.

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Matt Kennedy, a senior IPO market strategist at Renaissance Capital, which provides institutional research on public offerings, said that it was possible Uber would bite back and that Lyft's growth would decline. Uber - as well as Waymo, General Motors and others - is working on self-driving vehicles, which they expect to enter the ride-hailing business.



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