Lyft files for IPO, to kick off roadshow later this month

02 March, 2019, 09:44 | Author: Erin Carter
  • Lyft And Uber To Offer Stock Options To Drivers Ahead Of IPOs

If they are able to do that, and Lyft is still relying on drivers, its cost of giving rides likely would be far higher.

However, when a company IPOs, it means they'll be subject to the daily whims of the stock market and Wall Street investors, which not only increases scrutiny, but also means heightens pressure from investors to deliver on their financials.

Lyft was last valued at $15.1 billion but is expected to raise $2 billion to $3 billion when going public at a valuation of $20 billion to $25 billion, according to a report by The Information.

Under Lyft Inc's plans, drivers who have completed at least 10,000 rides on the platform will get $1,000 and those who have logged 20,000 rides as much as $10,000, the paper said. That continued a growth trajectory that saw revenue more than triple in 2017 compared with 2016, when the company brought in $343.3 million.

Lyft said its revenue had climbed from $343.3m in 2016 to $2.2bn a year ago, but losses had risen from $682.8m to $911.3m over the same period.

But Lyft is still losing money, and the losses are growing.

Gross bookings, or the total value of the rides Lyft sells before driver pay is deducted, reached $8.05 billion last year, 76 percent above the prior year and 323 percent above 2016.

Additionally, the firm said it will issue stock with a dual-class share structure.

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The average Lyft driver earns about $30 an hour before expenses, while co-founder and CEO Logan Green made over $41 million in 2017 including stock options.

Lyft's roadshow is expected to launch during the week of March 18, while Uber still needs several more weeks for its IPO preparation, Reuters had reported earlier this month.

Both Uber and Lyft have invested heavily in bikes and scooters as alternatives to auto rides for short trips, hopeful that a transportation option that does not involve paying drivers will prove profitable.

Pictured is a slide from the pitchdeck included in Lyft's S-1 filing.

Michael Reich, an economics professor at the University of Berkeley, noted that Uber and Lyft are now in a price war.

Operating in more than 300 markets in the U.S. and Canada, Lyft had 30.7 million riders in 2018 and 1.9 million drivers. The unveiling came almost three months after the San Francisco company filed confidential documents for its initial public offering of stock.

Exactly how much drivers have been making in recent years is unclear because Uber and Lyft do not release data on drivers' earnings.

This process will help determine how many shares the company will offer, as well as set the price of the stock, at the time of the company's public debut on the stock market. Its US ridesharing market share was 39 percent in December 2018, up from 22 percent in December 2016. Uber posted revenue $11.3 billion and losses of $1.8 billion past year. Uber's paperwork has yet to become public.

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