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Lyft filed Friday IPO filings with the Securities and Exchange Commission, beating its main rival Uber in the race to become the first application-based telemarketing company to be made public.
The company, which started as a university carpooling service in 2007, called Zimride, claims to have reached 39% market share in the United States in December 2018, compared to 22% in December 2016. This new growth comes from new drivers and drivers. as well as more frequent trips of existing users. For the quarter ended December 31, 2018, Lyft reported 18.6 million "active drivers" and more than 1.1 million drivers.
According to recent reports, Lyft is aggressively courting passengers by drastically reducing fares in anticipation of its IPO. This represents a huge cost to the company and these documents provide a first glimpse of Lyft's growing business, which is nonetheless dedicated to losing money. The company has achieved a turnover of $ 2.2 billion in 2018 by providing more than one billion trips. Lyft also lost $ 911.3 million in 2018, its biggest annual loss of the past three years. For 2016 and 2017, its losses were $ 682.8 million and $ 688.3 million, respectively.
"We are focusing our efforts on the transportation revolution and continue to dominate the innovation market," says Lyft at the beginning of S-1 document required by the SEC for US-based public companies. "We have established a network of pilots and pilots, or users, brought together by our robust technology platform that powers millions of rides and connections every day."
Lyft also intends to give some of its drivers cash bonuses so that these drivers can then use this cash to buy shares. This is a complex workaround to a unique problem faced by the carpool company, which can not allocate shares to drivers because of SEC rules that prevent the sale of shares of companies to freelancers.
Despite its launch before Uber, Lyft has always been overshadowed by its much larger competitor. But this allowed the company to position itself as a disjointed underdog, which paid off when Uber was the victim of a series of self-inflicted scandals in 2017. Headaches, allegations of corporate spying and revelations of sexual harassment have sent Uber into a gulf in public relations. Meanwhile, Lyft took the opportunity to recruit disillusioned drivers and runners. She has upgraded her app, stepped up her marketing efforts to attract more passengers and extended her exclusively American service into an additional 160 cities for a total of about 350.
Lyft is also competing with Uber to become a one-stop shop for a variety of modes of transportation, including bicycles, scooters and public transportation. In December, Lyft bought Motivate, the company that runs Citi Bike in New York. Like Uber, Lyft also runs its own electric scooter program.
Both companies declare wanting to end the possession of a personal car. But more than Uber, Lyft imagines itself as a think tank with great ideas for the future. Company co-founders John Zimmer and Logan Green have published policy documents predicting the end of personal car ownership in major cities by 2025 and asking more people to carpool by charging fees to those who do not do it.
Lyft operates only in the United States and Canada, while Uber is present in Europe, India and Latin America. Lyft also does not have a massive and growing food distribution business like Uber. As he embarks on his roadshow to meet investors, Mr. Lyft will likely answer questions about these shortcomings.
Becoming public before Uber is certainly a victory, but with its own risks. Lyft explains in his report that these risks include intense competition from Uber and an unpredictable market. The list then includes stand-alone technology, ever-changing regulations and exposure to liability resulting from abusive user activity.
Investors will seek information on potential regulatory blockages as well as legislation that may require Lyft to classify its drivers as employees. Last month, Lyft sued New York City for a new law increasing the minimum wage for drivers.
The governance structure of the company could also be subject to scrutiny. Last month, Zimmer and Green apparently were preparing to take control of the company, with a majority stake of less than 10%. This amount still seems to be outstanding: the deposit made public today does not indicate the percentage of expected stock.
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