Dissecting Lyft IPO for Uber and the future of mobility – TechCrunch

Extra Crunch Offers Members have the ability to tune into moderated and moderated conference calls from the TechCrunch editors you read daily. This week, TechCrunch leaders Kirsten Korosec and Kate Clark led an in-depth discussion on Lyft's IPO and the outlook for the future.

After climbing nearly 10% on the first day in public markets, Lyft's shares were reduced to the price of its IPO, as some investors worry about the profitability of the company (or of its absence) and its long-term fundamentals. . But the public list of Lyft is much more important than the latest IPOs of unicorns more and more common. As the Lyft, Lyft's first public transport-as-a-service company, provides a first insight into the economic model and its economy, and its development could eventually play the role of canary in the coal mine. for the future of transportation.

"Lyft, did not just survive, they grew up. 18.6 million people made at least one trip in the last quarter of 2018. This represents an increase from 16.6 million at the end of 2016. This illustrates the growth of the company. They also said they held 39% of the carpool market in the United States. This represents an increase of 22% in 2016.

For me, the big question is to say that they had the share of Uber, 66%, would they be able to make a profit? Is it determination? And I'm not convinced, that's why all these other aspects of the commercial model of transportation as a service [micromobility, AVs, etc.] are going to be really important. "

Kirsten and Kate deepen what the market response to Lyft means to Uber and the timing of its imminent IPO. The two men also explained their skepticism about the running economy and debated the innovative transportation model that would ultimately lead to the profitability of Lyft, Uber, and D & # 39; ;other.

To have access to the complete transcript and audio of the call, and to have the opportunity to participate in future teleconferences, become a member of Extra Crunch. Learn more and try it for free.

Danny Crichton: Hello and good morning everyone, this is Danny Crichton, editor-in-chief of Extra Crunch. Thank you very much for joining us today with Kate and Kirsten, TechCrunch reporters.

I will begin with a brief introduction for our two writers today. We have Kate Clark, our venture capital journalist. Kate has been with us for a while and covers everyone from start-ups and businesses. She is also a guest of the TechCrunch Equity podcast and also writes our weekly Startups newsletter.

Our other writer today is Kirsten, our intrepid automotive writer, covering everything Elon Musk, Tesla and everything else in the autonomous vehicle space. Kirsten has also been with us for some time and is also writing a newsletter she has just published in recent weeks on transportation. So with that, I'm going to give them the conversation now.

Kirsten Korosec: Thank you very much Danny. It's Kirsten Korosec here. The newsletter is a bit of a soft launch, but it is released on Friday and we hope to have an email subscription in the future, so keep an eye on that.

I should also mention that I too have a podcast centered on autonomous vehicles and future means of transport, called Autonocast, which comes out every week. Thank you very much for taking part in the call and just remember that we wish to participate. So, about half way, we'll open the queue and answer the questions. Let's start.

Before we go through the screen, we think it's worthwhile to provide an overview – a general timeline of events. We probably all know Lyft, of course, and most of us think that 2012 would be the launch date in San Francisco, but really, Lyft was built from Zimride's service. Who is the rideshare company created by John Zimmer and Logan Green in 2007.

Lyft has gained a lot of attention in 2018 compared to what happened last year, in the perspective of the IPO. But I think it's worth noting the intense activity and growth that occurred between 2014 and 2016. These are crucial years for Lyft, a frenzy of activity in a period where the company has gained ground, investors and partners.

To show the amount of activity that was going on; Lyft has organized two separate funding cycles, one for $ 530 million, the other for $ 150 million, just two months apart in 2015. You may also remember early 2016 its partnership with GM and the $ 500 million auto manufacturers investment as part of the F series $ 1 billion fund-raising effort.

It was really interesting because GM's president at the time, Dan Ammann, sat on the board, which he has since left. As Lyft and GM began to realize that they were competitors. Today, Dan is the CEO of GM Cruise, GM's autonomous unit.

2017 and 2018 have also been important years as Lyft launched its first international market in Toronto. They have made great progress on the front of autonomous vehicles, which we will talk about today, and in micromobility. Their scooter business was established in Denver in 2018. They bought Motivate, the oldest and largest electric bike sales company in North America. We finally arrive at the end of 2018, and it is then that Lyft confidentially files a statement with the FDC and we left for the race to the IPO.

It's been in the last two or three months that Lyft unveiled its prospectus, met with investors, set the price for its IPO, and made its public debut. So Kate, what are the wheels of the IPO and what's going on right now?

Kate Clark: Hello everyone that's Kate. That's why I'm just going to mention very quickly the timing of the last months in view of the Lyft IPO, a historic event. So, in December, Lyft began by filing confidentially to be made public. We learn later that they become public NASDAQ when they finally unveiled their S1 at the beginning of March.

That's after Lyft raised $ 5 billion in debt and equity for a $ 15 billion valuation. So there are a lot of people who are interested in what was the very first IPO with carpooling. So at the beginning of March, we can look more closely at Lyft S1, which indicates that the company has recorded losses of $ 911 million in 2018 and revenues of $ 2.2 billion. Thus, after calculating and gathering some data, many people quickly discovered that this meant that Lyft was suffering the largest losses ever recorded for an IPO. But it also posts the largest revenue ever recorded by a company prior to the IPO, just after Google and Facebook in this category.

So it's a very interesting IPO for a lot of people, given these huge losses, but also those huge incomes. The next time we see Lyft, their IPO will cost between $ 62 and $ 68. Some people quickly rushed to say that the price was perhaps a little lower, since it was a much anticipated IPO with a ton of demands. Thus, on the second day of the Lyft tour, they declare that their IPO is oversubscribed. So, the demand is seemingly huge, oversubscribed, so they decide that we will increase the price of our shares.

So Lyft says they'll charge a maximum of $ 72 a share, and then the day they go public, they charge $ 72 a share, the next day opening at $ 87 a share. So we are witnessing a massive stock market introduction that, in my opinion, was not particularly surprising given that they had already spoken to this demand and we already knew that demand was strong on Wall Street. Not just for Lyft but just for unicorn IPOs of this size, as they are so few. So, Lyft started trading to $ 87 a share, if you followed the news that was not there today.

Kirsten: Yeah so I was about to ask – Kate gives me the latest figures, you know that the focus is on the opening day but things have not kept up. So what has happened in recent days?

Kate: Yes, it's really difficult to manage expectations after an IPO. I mean, I think Lyft has been the subject of much criticism and his price is below the price of his original action. So, as I mentioned, Lyft opened at $ 87 a share, with a selling price of $ 72, but immediately they started trading below $ 72 a share. They closed Tuesday at 68.96 dollars per share. Still having a market capitalization of over $ 19 billion. So they still have a much higher value than they were as a private company, at $ 15 billion, but it's not very attractive to be below a price per share so quickly.

However, the price of his IPO has not exceeded the price of his IPO today, so let him have a few more hours and see where it closes. It is possible that it reaches something like $ 72, but it is still trading much less than those $ 87.

Kirsten: With such IPOs, and especially such celebrity, stock prices and volatility will receive a lot of attention. So I'm wondering, in your opinion, what did this first week or those first few days of volatility tell you? What does he say about Lyft's future and, of course, about his present?

Kate: Yeah. I mean, it's hard to say. I think a lot of people were wondering if Wall Street would be interested in a company like Lyft, which is extremely unprofitable at the moment and still has years to become profitable, if ever it becomes profitable.

So at this point, you need to ask yourself: were some of those investors who bought Lyft right away, were they really long on Lyft? Because it seems that many of these investors have already sold their shares and may not have been as invested in Lyft's long-term profitability plan, which includes many very dubious things, such as The future of autonomous vehicles, speak later in this call. And there is a lot of uncertainty there.

That said, it is not uncommon for a stock to experience immediate volatility, and you can not assume the future of its stock just because of some early volatility.

And we have collected some examples of IPOs where some early volatility did not determine the future in the long run. For example, Carvana, which is an online used car dealer in the automotive sector, experienced some volatility in the beginning. The stock slipped in the first few months, but eventually moved up.

Kate: Carvana therefore opened at $ 13.50 a share, falling below the price of its IPO, so it did not even have the success of this introduction. And then in 2018, he reached a record $ 65 per share. Today, it is trading around $ 58 per share, which in the end is a positive story to tell.

Snap is another example. Snap, which took four months to fall below the price of its IPO in 2017, and we all know that Snap has certainly not been successful and that it is trading well below its offer price. But finally, Facebook, for example, fell below the price of its IPO on the second trading day and then had a difficult first year on the stock market before the stock finally took off and became a very obvious success .

Kirsten: So, Kate, I wonder why you think there was this first race this first day. Was it excitement? Is there anything material that drives up the price? What was the cause?

Kate: I think there was a lot of excitement and demand around this IPO because it was rather unique and the investors seemed to want very long that Lyft would become this extremely profitable company. And I think that's largely due to the fact that in the S1, although you've seen these losses really really important – quite significant, but ridiculously huge – you've seen that they're diminishing over time and that there was clearly a way in which Lyft could go where it would be profitable, for example in the next five years.

And I think Wall Street was really paying attention to that, and they were not paying attention to some of the other parameters. Now they have removed their pink glasses and consider Lyft as a publicly traded company. It's a little different now that the company has started.

Kirsten: Well, I mean, I often like to consider IPOs, and especially in the case of Lyft, as an indicator of investor confidence in the growth prospects of the company, because it This is a company that certainly generates significant revenues. he has significant losses and his planning is really not only for the present but for the future. This has been described as disruptive for a reason and is certainly very forward looking. So I wonder if you think it was a good strategy for Lyft. They wanted to open the field to "the man of all time" when they actually went to the market. They took a different approach and do you think it could have had an effect? I mean, it's very important to them, but I was wondering if you thought it meant that some investors are not so disciplined.

Kate: Do you mean with the fact that they were offering bonuses to their employees and their drivers to actually participate in the IPO as well?

Kirsten: Absolutely. This is actually a very good point on which you can perhaps elaborate. Lyft has taken a slightly more open approach to its IPO. In general, IPOs may be closed to large institutional investors only. So, maybe that led them to have more volatility?

Kate: Yeah, Lyft has provided some of his drivers up to $ 10,000 to theoretically buy shares at the IPO. Do I think this has had a significant impact? I do not know. I think there is not enough comparison, not enough data to really make a decision or to get a clear idea if it was really part of the volatility. Given the uncertain nature of Lyft's future and its heavy losses, I think their volatility was quite inevitable and the people who pay attention to it are probably not particularly surprised at how the stock has changed in the past. during the first two days.

And I want to add that there is a six-month lock-in period for venture capital funds that own Lyft and their employees. So I think we're not sure what will happen when this lock-up period ends. these holders can simply sell their shares at that time or how that will also affect the price of their shares.

Kirsten: So, something to watch for. It reminds me a lot of a company I write a lot about, namely Tesla, which I have been covering for years. And this is one of the most volatile stocks, and their investors have big institutional investors, but the number of fanboys they have with smaller investors, sometimes supporting the share price, or adding to volatility, and I'm rather curious to see if this happens with Lyft. If you attend a shareholders meeting at Tesla, for example, it is filled with people passionate about the brand and its CEO, Elon Musk.

And Lyft and maybe Uber, if they end up successful on their IPOs, you can see that this is happening potentially because people attach great importance to the brand and the service it provides. So I'm curious to see how it all moves. And I tend to think that I personally invest in mutual funds and things like that. I do not invest in any of these companies, but the long and patient vision tends to be the best, and trying to catch a knife falling, as investors told me, is never a good idea .

So I'm curious to see if investors grow up and learn with Lyft, if they will become disciplined and will sort of wait for them to see the long-term growth prospects of the company. So we are talking about Lyft and, therefore, I can not talk about Uber. I wonder what you think it could mean for Uber. The big story was first to beat Uber during his IPO and I wonder what that means. Does this indicate what Uber will experience?

Kate: I think this issue really concerns everyone, including mine. I will say that I still think it was very beneficial for Lyft to go out first. Imagine if Uber and himself will experience some volatility, which will probably be the case if she were to leave first, I think it would have scared Lyft much more than Lyft's volatility might not be scary for Uber. That said, I think I'm split by two ideas right now about the impact this has on Uber's IPO. I think if Lyft's stock continues to be volatile and perhaps even lower than it has been. I think there's a chance for Uber to finally decide to postpone his IPO.

I think for several reasons, namely that Uber is in no hurry to become public. They have the ability to wait. They filed to go in public. So that will probably happen very soon, but it may not happen in April, as they anticipate.

In contrast, Lyft went public with a market capitalization of $ 24 billion or $ 25 billion. While Uber will debut with an initial market capitalization of $ 120 billion. Thus, these IPOs, although they are two IPOs and companies very similar in many ways, are also very different and Uber operates on a different scale although it is still not profitable. And has some of the same problems that investors probably notice about Lyft.

I think it's either that maybe they decide to push it away, or maybe Uber is like, well, we're five times bigger, six times bigger. We have much broader statistics to show investors. There is just a chance that it goes both ways. I would like to have a better, more concrete answer, but I do not think we know it yet.

Kirsten: Well, I agree not to take hot only takes a few days in this IPO. I think it's a good time to ask questions. While waiting for a question, I will follow up with you, Kate. What do you think it means for Uber? Will he delay his IPO?

Kate: For now, no, I do not think they'll do it. But it's like I said, it's hard to say because the Lyfts IPO is only a few days old. But no, I think you have to imagine that they are ready to discuss the possibilities of the Lyfts IPO and are already planned in case of volatility. They may have already assumed that would happen, since it is not uncommon. So, for now, I'm going to say no, I do not think they'll delay, but it's certainly always a possibility.

Kirsten: D & # 39; agreement! Great. I think that another very interesting piece for Uber was the acquisition of Careem. This is an agreement that was concluded just before their IPO, so he was turning away from Lyft's attention, just for a moment.

Why did Uber do that? Is not this a sign that they are delaying their IPO? Is it just ready for that? What do you mean about it? I wonder if this may be a strategy to show global investors, and in particular potential shareholders, what the future will be. Or is it another reason – Is it to justify their very big losses?

Kate: I think these are the last two things you said. As a reminder, Uber pays approximately $ 3.1 billion to acquire Careem, a Middle Eastern company. So, basically, just the Uber of the Middle East. Uber has a tradition of acquiring smaller competitors, like this one, in different markets where it is not active, which allows it to grow rapidly.

So I think it's a big job to do before being made public. So, I guess we do not know if they will necessarily go public in April, but I think it was a decision to present to public market investors a preparation for an IPO, to show "we've just acquired this society, here is more evidence of future growth. "As you said, this is definitely a justification for those huge losses that Uber suffered.

Kirsten: Thanks for that. Questions?

Question from the appellant: Hello. When we talk about the future and achieving profitability, what role, if any, do you think of acquiring a scooter or other mobility company for companies like Lyft and Uber?

KirsTen: This is an excellent question. I think it will be a huge part of their two companies. Many people describe this as the first IPO. We must stop calling this a companion company. They are transportation companies as a service and they make money. But generating revenue rather than making a profit is a totally different thing. When we start talking about carpooling, it's a difficult business. With these, it's a very light activity, right? They do not own cars and technically they do not use these drivers.

But at the same time, in 2016, only about 1% of Americans used carpooling. So you see this opportunity, but they are not going ahead. There remains a ton of cars in circulation. Yes, sharing has definitely increased, but 17 million new cars were sold in the United States last year. Scooters, self-service bicycles and other businesses will be the key to profitability, as carpooling alone is difficult to achieve. It is not difficult to generate income. It is difficult to make a profit.

And I wonder, talking about this path of profitability, I think it's worth noting how much they grew up. Lyft, did not just survive, they grew up. 18.6 million people made at least one trip in the last quarter of 2018. Up from 16.6 million at the end of 2016, this illustrates the growth recorded by the company.

They also said they held 39% of the carpool market in the United States. This represents a 22% increase in 2016. For me, the big question is to say that they had Uber's share, or 66%, would they be able to make a profit? Is it determination? And I'm not convinced, that's why all these other aspects of the commercial transportation model as a service will be really important.

Kate: I think what you've pointed out is important, that Lyft and Uber are both becoming transport companies, not recovery companies, and that their long-term visions involve scooters, bicycles, autonomous vehicles, all kinds of transportation models other than just carpooling. .

Kirsten: I hate being tasteless here and saying, I do not know, but I really think it's going to boil down to a variety of objects. It will not be enough for Lyft to develop its snowmobile business. And I should point out that Uber should be treated in a certain way in the same way, but there are distinct differences. But it is important for us to consider Lyft as a transportation company as a service. I mean, they say in their flyer that transportation is a huge market opportunity. The difficulty is of course to turn that into profit. There could be an opportunity there.

So there is this very light activity that they currently have, it's the turnaround, but then they make acquisitions in the area of ​​micromobility and it will become more capitalistic. And that will force them to change companies. And then there is the autonomous vehicle part. Finally, I actually think that one of the elements of their S1 that has not really attracted much attention is what they are looking for in terms of public transit. And they said they and Uber intended to be part of the transit ecosystem.

Now, that does not mean that they will necessarily use buses, but there are people with whom I spoke in the industry who really feel that, in the case of Uber, they want to control all the modes of transport. For Lyft, I see them see more opportunities financially with the data, become more of a platform and become this one-stop shop where you use an application to find out if you want to use the scooter or the bike, or ride -hailer or buy this ticket for the L in Chicago or the Bart system.

So I really think that the public transit sector is often ignored and that cities now have much more control and intervention. We see it in New York with congestion pricing. This will force Lyft and Uber to take advantage of these opportunities and use their platform in a way that may accelerate faster than expected.

Kate: Public transport interests me a lot, but I am also very skeptical about the scooters and bikes for Lyft, I think, given the economic situation of the unit, I certainly would not count on them so that Lyft is the way to go. profitability. I think autonomous vehicles are a much better way to profitability. Thus, many companies, Uber, Lyft, Waymo and more, focus on autonomous vehicles and their development, whether hardware or software. How does Lyft's strategy with autonomous vehicles differ from some of its competitors or is it different?

Kirsten: That makes the difference, and it's curious, is that you do not necessarily see micromobility as an oath of profit and you are interested in audiovisual vehicles and I write about audiovisual vehicles, but I think that they are a more difficult path to profitability. because of the nuts and bolts that it takes to develop them.

It is therefore sufficient to intervene very quickly on micromobility then to switch to audiovisual systems; To show the opportunity but also the volatility of a concrete example of micromobility, I was in Austin for South by Southwest, I think you were there too and you have probably already seen scooters everywhere , is not it? Eighteen months ago, there was no scooter or bike in town. Ensuite, la part de vélo est arrivée en premier.

Et je parlais à ce maire d'Austin et à l'un des représentants de Spin, une entreprise appartenant à Ford, et ils m'ont dit quelque chose de vraiment remarquable auquel je n'avais pas pensé, à savoir que les scooters perturbaient la part de vélo. business. Alors les vélos partent, puis les scooters arrivent et tout à coup, ils retirent les vélos de la rue parce que personne ne les utilisait ou ne les utilisait pas au même niveau que les scooters.

Lyft passera par ces mêmes douleurs de croissance et les gens découvriront ce qui fonctionne. Et comme vous l'avez dit, la situation économique des unités est un problème, l'usure des scooters fait grimper les coûts et les revenus, mais il est très difficile de réaliser des profits.

Mais c’est une affaire à court terme, non? Donc, au moins, cela génère des revenus pour le moment. D'autre part, vous avez cette autre pièce, qui est la pièce AV. Lyft fait des choses vraiment intéressantes sur la pièce audiovisuelle – ils ont une approche à deux volets.

Ils ont donc essentiellement créé une tonne de partenariats pour utiliser leur plate-forme. Cela a donc commencé il y a quelques années et des entreprises comme Aptiv, drive.ai, même Waymo et nuTtonomy, achetées il y a environ un an par GM et GM, et Lyft permet essentiellement aux développeurs d'utiliser leur plate-forme et de se connecter à leur véhicule autonome. offre ces manèges.

Et le meilleur exemple de cela, si vous êtes allé à CES ou à Las Vegas, je dois dire plus précisément, est-ce que ce partenariat entre Lyft et Aptiv – et Aptiv en tant que fournisseur de niveau 1, s'appelait autrefois Delphi, ils se sont séparés, ils ont acheté nuTonomy, et ils sont maintenant aptes. Et cela prend Aptiv automatisé BMW, qui sont sur le réseau Lyft. Si vous partez en voiture, on vous demandera peut-être si vous voulez une voiture autonome ou «êtes-vous d'accord avec une voiture autonome?». Et ils ont un conducteur de la sécurité, aucun humain n'en a encore été retiré. Mais ils ont fourni environ 35 000 manèges depuis que je veux dire janvier 2018.

Ensuite, ils se lancent également dans Level 5, une division dédiée aux véhicules autonomes qui a été lancée en 2017. Ils créent ici essentiellement un système de conduite autonome ouvert ou un SDS ouvert. En outre, ils se sont associés à Magna, un fabricant de pièces automobiles, pour développer ces systèmes de conduite autonome pouvant être fabriqués à grande échelle.

Vous voyez donc une ruée vers des partenariats et une sorte de double approche et tout cela coûte beaucoup d’argent. Et je ne saurais trop insister sur le montant qu’il en coûtera ou qu’il en coûtera pour développer ces systèmes et les déployer commercialement. Et j'entends d'autres entreprises dire que 5 milliards de dollars sont nécessaires pour acquérir des véhicules autonomes. Donc, développer la pile, faire la gestion de la flotte, l’entretien, tout ça, c’est beaucoup d’argent. Et, je ne sais pas où Lyft obtiendra ce capital, le tirera-t-il du marché libre ou devra-t-il aller demander plus de capital.

Kate: Alors, quand pensez-vous que Lyft sera en mesure de commercialiser des véhicules autonomes?

Kirsten: La chronologie? Donc, selon vos interlocuteurs, vous pouvez entendre n'importe lequel de ces développeurs entre cinq et 30 ans. Je pense qu’il est important de parler de langue et de parler de véhicules autonomes. Soyons donc clairs: à l'heure actuelle, il n'y a pas un seul déploiement de véhicule commercial autonome dans lequel un être humain ou un conducteur de sécurité a été retiré du volant. Cela n’existe tout simplement pas.

Il y a beaucoup de pilotes et Waymo est probablement considéré comme le chef de file de cette liste, bien que ce soit un peu déroutant pour moi car ils ont tellement de partenariats et qu’ils sont devenus concurrents de certains de ces partenariats. L'analogie que j'utilise est «Survivor», l'émission de téléréalité. Tout le monde veut faire ces alliances pour ne pas se faire élire hors de l’île.

Et nous en sommes maintenant au stade où le développement de véhicules autonomes est entré dans ce que nous appelons le creux de la désillusion, c'est-à-dire la tête baissée: «Éloignons-nous du battage médiatique, faisons le travail difficile.» Et je pense que nous allons voir beaucoup de ces partenariats et les vents contraires se présentent vraiment au cours de la prochaine année, 18 mois. Donc, pour fixer une date butoir à Lyft, tout dépendra vraiment de l’un ou l’autre de ces partenariats qui se concrétisent et qui sont réels. Je pense que celui avec Aptiv me semble le plus réel, sur la base de ce que je sais que la société est en train de faire et que je peux les voir faire beaucoup plus de pilotes au cours des 18 prochains mois.

Cela signifie-t-il un déploiement commercial sans conducteur de la sécurité humaine derrière le volant? Je ne suis pas sûr de pouvoir voir beaucoup plus de ces pilotes avec un pilote de sécurité humaine en expansion au-delà de Las Vegas. Je vois des projets pilotes se dérouler absolument dans les 18 mois à venir. Le problème sera de savoir quand le conducteur responsable de la sécurité humaine sera retiré et avec quel partenaire.

Kate: Alors devrions-nous ouvrir à nouveau aux questions?

Question de l'appelant: Hi, I was just wondering how we should think about the regulatory risks that might exist as these companies expand to new cities, new markets, or even the public transport use case you mentioned. Thanks.

Kirsten: The regulatory piece is an interesting one. Let’s talk about ride-hailing first. We’ve already seen the regulatory environment, in cities, push back against companies like Uber and Lyft. I think the congestion pricing model that just launched in New York City is going to be one to watch and could be something that will put pressure on, on businesses like Lyft.

Kate: I agree and just to speak, quickly on the scooters; I think the narrative around scooters has been pretty dominated by how cities have forced them out or cities push these strict regulatory barriers on them. And I think that’s still playing out very much. There are even some scooter providers that have had to pull out of cities that they worked very hard to get into in the first place. So I think that has slowed down some of the growth there. And given that Lyft has micromobility as such a key part of their road to profitability, I think that’s partially why I am a little bit skeptical of how that’s gonna play out.

Kirsten: One thing we’ve found, and something to consider for Uber as well, in the future, if any of these AV developers end up, filing for IPOs on their own — there’s been chit chat about Waymo someday doing that or GM cruise someday— the implications for all of these companies and their relationship with cities should not be ignored or undervalued.

And I think you see a bit of that playing out with the present day track we have, which is the ride-hailing scooters and bike share cities and transit agencies or the DOT of different counties finding that they are in a more powerful position than they’ve ever been before. And they are exerting that power.

And so you will see instances like Los Angeles where they have put forth a mandatory data sharing component if you want to operate in their city. This raises some privacy concerns by the way, but it also adds another cost to a company or certainly forces them to look at their business a little bit differently.

Then you start talking about AVs and where are they will operate, how they will operate, where are they will park, what type of vehicle will be allowed in the urban center. In places like Europe, there are strict emissions rules, so that’s going to go to an AV or hybrid profile. And it’s important to think about what that regulatory framework might be and acknowledge the fact that it’s really a mishmash.

There are voluntary guidelines on the federal level right now, but there were no mandates. And so it’s really left up to the cities, counties and states to decide how an AV might be deployed. It’s going to mean probably more lobbyists in DC working with federal folks to ensure that their business doesn’t get hamstrung as a result as well as more of a presence in those cities and states and counties.

But Kate, I’m wondering what is your view from a startup perspective? Do you think of Lyft as a startup anymore are they acting like a startup or are they acting like a company that could handle all of these different complicated, various challenges? I mean, we’ve got pricing pressure, regulatory pressure or you’ve got AV development, opportunities with scooters and all this other stuff. So are they acting like a company that is able to handle this?

Kate: That’s an interesting question. I mean, they’re definitely not a startup anymore by, by anybody’s definition. You maybe could have still used that word, if they were still private, but even then, I know many people would yell at you for using that term for a company worth $15 billion. But now it’s a public company. It’s not a startup. I don’t think they’re acting like a startup, no. I think that they are mature in the way that they’re handling all of these different, so-called paths to profitability.

But we need to wait and see. Let’s see how this year goes, let’s see how they handle all the criticism that they’re going to undoubtedly take from Wall Street or from everyone who’s either interested in buying or just taking a seat and watching how the stock favors and then we’ll know what kind of lessons they took from all those years as a private company. Then we can decide if their behavior is really that of a mature public company.

Kirsten: I do want to make one point that I think is an interesting one on Lyft’s strategy versus Uber is in terms of AVs. Let’s all put a big asterisk that says no, AVs are still a ways out. It is important to note the Lyft and Uber’s strategies for AVs are wildly different and Uber does not take this dual approach. Uber is throwing a ton of capital towards developing their own, self-driving stack and also they’ve done, some acquisitions as well.

They’ve also had quite a bit of trouble. Last year Uber had the first self-driving vehicle fatality that happened in Tempe, Arizona, which looked like it was going to derail their self-driving unit, but it did not. They’re back, testing in a very limited way, but Lyft’s is all about what they call the democratization of autonomous vehicles.

And we can look at that as marketing speech, but I do think that it’s important to look at those words because it shows what their business model is. Their business model is partnerships, alliances, opening up the platform and casting the widest net possible. What I’m very interested to find out is which approach will end up being the winner. It’s going to be a very long game. It’s not going to be anything that’s going to be determined in the next year. I think what Lyft’s proven is that when they look like they’re down and out, they come back.

We’ll see what the better approach is. Do you do everything in-house and launch your own robo-taxi service? Or take capital partners on or do the Lyft approach, with multiple partners? Are partnerships actually too complicated? As someone who covers the startup world, do you have a thought on which one might work or not?

Kate: I have no idea which will work better and I’m sort of excited to see where this all goes, especially as Uber and Lyft are now going to be public.

That’s a good spot to end the call on.

Kirsten: Thanks so much for joining. Thanks again for being Extra Crunch subscribers, we really appreciate it. Bye everyone.