2018 IPO Prospects: Lyft may go Public Sooner than Uber

Posted on Wednesday, Oct 25th 2017

Earlier this year, I had observed how it may be a while before we see the IPOs for ride-sharing apps like Uber and Lyft. For Uber, that prophecy appears to be holding good considering the widespread scandals surrounding the company with reference to its corporate culture and business practices. But, recent reports suggest that Lyft may instead be on a fast ride to the stock exchange.

Lyft’s Financials

Started in 2012 as Zimride, Lyft is a peer-to-peer transportation platform that is also the biggest rival for Uber. Like Uber, Lyft connects passengers who need rides with drivers who are willing to provide these rides in their personal vehicles. Earlier this October, Lyft completed its fifth anniversary. It claims that the service is now available to 95% of the US population, compared with 54% at the beginning of the year. Unlike Uber though, Lyft is yet to make an international appearance. Since inception, it has provided more than half a billion rides to the passengers in the US. Lyft is now delivering more than 1 million rides daily. It took Lyft four years to deliver the first 100 million rides, but now available to 95% of the US population, compared with 54% at the beginning of the year

Like Uber, Lyft earns revenues by charging a fee on the ride fare. Lyft does not disclose the share it takes from the gross bookings, but analysts estimate that it is anywhere between 20% and 30%. According to recent reports, Lyft’s gross bookings grew nearly 25% to more than $1 billion in the second quarter this year. That would translate to revenues of $200-$300 million for the quarter. Lyft’s financials are still modest when compared with Uber’s gross bookings of $8.25 billion during the same period. Despite the high revenue growth, Lyft remains unprofitable. Analysts estimate that Lyft reported a loss of $130 million for the first quarter of the year, compared with Uber’s loss of $708 million for the same period. More recent financials for both companies are unknown.