In the neverending battle of ride-sharing tech company behemoths, Lyft has consistently lagged behind Uber in terms of market share. However, on Thursday (Nov. 6) Lyft beat Uber for once as the former took the first steps in filing confidential documents for an initial public offering.
The ride-share company plans to hit the market in 2019 and details of the IPO will become public early next year where some are projecting the company’s valuation to be in the $20 billion to $30 billion range.
Big valuation for Lyft, but Questions Remain
While Lyft remains a distant second behind Uber, its operational capacity is nothing to be looked down upon. The company currently has driver fleets in the U.S. and Canada and currently commands a 35 percent market share. But like its competitor, both have failed to show they are profitable.
There are greater questions about the company’s future going forward. Where Uber has diversified its revenue streams through Uber Freight, meal delivery, and a global presence in ride-hailing, Lyft still solely relies on domestic ride-hailing for its primary operations. Also, with a future of automated driving on the horizon, how Lyft and Uber grapple and succeed with a decreased workforce and rapidly changing technological advances remains to be seen, though both companies have committed resources to self-driving car tech.
The silver lining for the IPO, though, is that filing the IPO before Uber gives the company “first-mover advantage.” This means that Lyft will effectively guide investor expectations while offering potential suitors a glimpse at a popular startup that has been private for a long time.
The IPO also gives Lyft a boost in publicity and exposure, particularly in countries and markets where Lyft’s footprint is nonexistent. The IPO is an opportunity for Lyft to control investor expectations and the narrative around ride-hailing companies months before Uber gets into the game.
Despite Lyft playing little man to Uber, with a volatile market that could fluctuate at any given chance, Lyft’s decision to put the IPO out now could prove to be a shrewd move. Given the trade turmoil in the news, offer prices could fluctuate in the coming months, going even lower. Lyft could be dodging a bullet by opting to file now.