NEW YORK (AP) – Lyft is growing quickly ahead of its initial public offering (IPO) but continues to bleed money and may struggle to turn a profit as it tries to catch up to Uber in the booming ride-hailing market, according to a federal filing.
The company released its financial details for the first time on Friday, giving the public a glimpse into its performance before deciding whether to buy into a transportation trend that has changed the way tens of millions of people get around. The unveiling came nearly three months after the San Francisco company filed confidential documents for its initial public offering of stock.
Lyft reported USD2.2 billion in revenue last year — more than double its USD1.1 billion in revenue in 2017. That continued a growth trajectory that saw revenue more than triple in 2017 compared with 2016, when the company brought in USD343.3 million.
But Lyft is still losing money and its executives warned it may struggle to turn a profit, according to Friday’s filing. The company lost USD911 million last year, bringing its total losses to nearly USD3 billion since 2012 while raking in USD5.1 billion in venture capital.
Its cash balance is also shrinking. Lyft had USD517 million in cash and equivalents at the end of last year, about half of what it had at the end of 2017. The IPO will enable the company to raise more cash to finance its operations and expand while management tries to figure out way to turn a profit.
The next step for Lyft will be to meet with potential investors during presentations known as a “road show” on Wall Street, then determine how much stock it will sell in the IPO and how much to demand for its shares. If all goes smoothly, Lyft’s stock market debut will likely occur in late March or early April.
Lyft has been in a race with Uber to be first to offer its stock to the public, and has positioned itself as the affable alternative to its larger and more ubiquitous rival. Uber, which struggled with public relations setbacks in the past, expects to file its IPO later this year.
Together, the two could raise billions of dollars to fuel their expansions and give investors an opportunity to see how the companies plan to become sustainable.
Lyft’s filing says that its co-founders — CEO Logan Green, 35, and President John Zimmer, 34 — will keep significant control of the company after it goes public and “will be able to significantly influence any action requiring the approval of our stockholders,” including the election of board members, a merger, asset sales or other major corporate transactions.
The company’s share of the US ride-hailing market was 39 per cent in December 2018, up from 22 per cent in December 2016, according to the filing, which cited growth from new drivers and riders as well as increased ride frequency. It reported 30.7 million riders and 1.9 million drivers in more than 300 cities in 2018, and has given more than 1 billion rides since its inception in 2012, according to the filing.
Lyft’s market-share gains in recent years came at a time when Uber was dogged by reports that drivers accosted passengers and that the company allowed rampant sexual harassment internally — revelations that ultimately led its co-founder Travis Kalanick to resign. Uber has been working to repair its image under CEO Dara Khosrowshahi, who tweeted congratulations to the Lyft team Friday, calling it “a big moment for ridesharing!”
Lyft allowed customers to tip drivers earlier than Uber, building into its brand the sense that it treats drivers better than its main competitor. In its filing, Lyft said it will pay cash bonuses of USD1,000 and USD10,000 to drivers who meet certain criteria, and that drivers may use those bonuses to buy the company’s shares.
Bookings, a figure representing Lyft’s fares after subtracting taxes, tolls and tips, have been rising dramatically — a trend that the company intends to underscore in its presentation to potential investors. Lyft’s bookings surpassed USD8 billion last year, 76 per cent more than in 2017 and more than four times the number from 2016. The company’s revenue of USD2.2 billion last year represents Lyft’s slice of the bookings.
“We believe this is a key indicator of the utility of transportation solutions provided through our multimodal platform, as well as the scale and growth in our business,” the company said in the filing.
Lyft, known for the pink moustaches that used to adorn car grilles, was valued at just over USD15 billion last year. In addition to ride-hailing, it offers shared car, bike and scooter rides.