Lyft IPO sets rollout for ride-hailing, sharing economy
WASHINGTON: Lyft is raising some US$2.5 billion in its Wall Street offering, which is seen as turning point for the ride-hailing business and the so-called “sharing economy.”
The San Francisco-based firm expected to begin trading as soon as Friday at US$72 a share, Lyft said in a released statement.
“This is a clear, positive indicator of robust investor demand heading into the company’s first day of trading tomorrow,” Wedbush analyst Daniel Ives said in a note to investors.
Ives called Lyft’s stock market debut a ‘watershed’ event for the tech sector and ridesharing industry that he saw as “one of the most transformational growth sectors of the US consumer market over the past five years.”
Lyft will have a valuation of at least US$20 billion with the initial public offering (IPO), one of the first from a wave of venture-backed ‘unicorns,’ or startups worth US$1 billion or more.
It will trade on the Nasdaq exchange under the symbol LYFT.
Lyft’s entry to the public markets comes ahead of a hotly anticipated offering from larger rideshare rival Uber, which is valued at some US$70 billion, and other tech startups including the business collaboration firm Slack and visual discovery engine Pinterest.
Both Lyft and Uber are promoting their moves as lifestyle-changing, which could wean dependence on private cars and help reshape urban landscapes.
“Ridesharing has transformed our lives, making it easier and cheaper to get where we need to go, and it’s pioneering an undeniable trend toward transportation as a service,” said a research note this week from Gene Munster and Will Thompson of the investment firm Loup Ventures.
These firms, which are stepping up moves to autonomous rides, have been expanding aggressively – with Lyft gaining market share in the United States and Uber in dozens of international markets.
They have also sought to become broader transportation platforms that connect consumers to escooters, electric bikes and local transit systems.
Uber and Lyft are among the most prominent firms in the sharing economy, which also includes home-sharing platform Airbnb, and highlight a trend away from ownership to services.
Lyft says it aims to play a growing role in the US$1 trillion US transport sector. But analysts point out that competition is growing and that any investment may be risky.
Lyft lost US$ 911 million on US$2.2 billion in 2018 revenues. The documents show revenues grew sharply from US$343 million in 2016, but losses widened as well.
Analyst Richard Windsor, who writes the tech blog Radio Free Mobile, argues that Lyft may not be ready for the scrutiny it will face as a publicly traded firm. — AFP