Lyft tries to differentiate itself from Uber in its IPO pitch

The rapid rise in the number of bookings on the platform made possible by the company's scalability-first mindset allowed Lyft to secure 39 percent of the ridesharing market in the U.S. As executives and advisers hit the road to market shares to possible investors in the next few weeks, they're likely to be pitching to a group that's no stranger to money-losing tech listings.

San Francisco-based Lyft posted a net loss of US$911 million on revenue of US$2.2 billion for 2018, according to Friday's filing with the Securities and Exchanges Commission.

The ride-hailing company would be traded under the ticker "LIFT", and is seeking to create a dual-class stock structure that would concentrate voting power in the company's founders, Logan Green and John Zimmer. Uber, which is expected to go public later in 2019 as well, has lost over $10 billion in since it was founded, despite its revenues exceeding $11.5 billion. Lyft plans to launch its two-week roadshow to pitch potential investors the week of March 18, setting up the company for an early April debut.

Wall Street analysts have estimated Lyft could be valued at between $20 billion and $30 billion in the IPO, and Uber at around $120 billion.

"We believe that the world is at the beginning of a shift away from auto ownership to Transportation-as-a-Service", the company said in its regulatory filing.

The bookings on the Lyft app surged from $1.9 billion to $8.1 billion in the same time frame, by 326 percent. Revenue had skyrocketed more than 200 per cent in 2017 compared to 2016, when the company brought in $343.3 million. Lyft already offers bike and scooter-sharing schemes. Uber and Lyft have been subject to similar attacks on their business model, which classifies drivers as contractors and not employees. For 2018 it represented 58 percent of Lyft's total costs and expenses, which increased overall by 77 percent from the year before, the filing shows. Both Lyft and Uber were expected to file initial public offerings soon, but it appears Lyft has beat its main competitor to the punch. Growth year-over-year slipped throughout 2018, falling from 130 percent in the first quarter to 94 percent in the fourth quarter.

Lyft has been eager to emphasize its growth to investors over its total revenue, which is dwarfed by Uber. Drivers can use those cash bonuses to buy stock in its "directed share program" when the company goes public. Industry giant Uber is in control of the other 66 percent of the ride-hailing market in the US.

A year ago when Uber CEO Dara Khosrowshahi got behind the wheel to understand life as a driver for his ride-hailing company, he failed miserably. In replacement, Lyft is giving out cash bonuses to some drivers with "good standing", which can be (but doesn't have to be) spent on shares.

As revealed in documents filed on Friday, Lyft's biggest shareholders include Japan's Rakuten, General Motors, Fidelty, Andreesen Horowitz and Alphabet.

  • David Armstrong