As it prepares to go public, Lyft reveals booming revenue, monster losses and a big bet on the future of transportation
IN SILICON valley’s ride-hailing duo Lyft has always been the wacky one. Uber, its far-larger competitor, opts for sleek black for its brand; Lyft likes hot pink. Most Uber drivers concentrate on driving; Lyft has long encouraged its drivers to decorate their cars, handing out fluffy, three-foot-wide pink moustaches for them to pin to their grilles. One driver in Los Angeles used to keep a magnetic word-board in the car, encouraging passengers to use it to compose little poems as they travel.
That the company is filing while still losing money is now the norm for technology firms going public. Still, its gigantic losses make a sharp contrast with the circumstances ofipos from earlier on in the tech boom. Google, for instance, had been profitable for three years when in 2004 it offered its shares. In the three years before ipo, Google’s annual revenues had grown on average at a rate two-and-a-half times faster than those of Lyft.
Lyft’s gentler image has also helped, after a bout of bad press damaged Uber’s reputation, and Lyft has been benefiting since, winning market share from Uber at a rapid clip, particularly in cities on the West coast. Data from an independent consultancy, Second Measure, show that Lyft has 29% of the ride-hailing market in America . The figures from Second Measure also demonstrate that the rate at which Lyft is pinching Uber riders slowed in 2018.
Another path to profitability is to bypass ride-hailing’s biggest expense: drivers. The scale of the cost is illustrated by the fact that Lyft took a whopping $8.1bn of bookings in 2018 through its app, for revenues of $2.2bn. The difference, of $5.9bn, went to Lyft’s drivers. Having cars driven by software would dramatically lower that cost.
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