Dive Brief:
- Lyft on Friday filed paperwork with the Securities and Exchange Commission (SEC) to go public. Trading could begin in March; the company will be listed as LYFT on the Nasdaq Stock Market.
- The filing did not specify a potential valuation, but The Wall Street Journal reports that the company is expected to exceed its private valuation of $15.1 billion, citing people familiar with the offering. The filed S-1 form also showed that the company continues to experience heavy losses, although at the same time it is also growing revenue.
- Lyft is the first of several tech giants expected to go public in 2019, including ride-hailing competitor Uber.
Dive Insight:
The investor response to Lyft’s filing will be closely watched as a potential bellwether for other tech filings expected later this year, like Airbnb, Slack and Postmates. It will probably be most directly compared to Uber, which has indicated it will go public early this year, although with a significantly higher value. Uber was recently valued as high as $120 billion, although experts warned late last year that investors could be scared off by the companies' heavy losses.
Lyft’s filing reflects the significant strides it has made in going beyond ride-sharing, and its efforts to give people mobility options that do not involve single-occupancy vehicles. Besides offering transit directions and encouraging carpooling through shared rides, Lyft acquired bike-share firm Motivate last year and has committed to investing in expanding networks in member cities. Lyft also launched a shared scooter network in cities like Denver and Los Angeles, and has also been pushing into autonomous vehicles (AVs); its filing notes that developing such vehicles or partnering with automakers is a key part of its future.
A key hurdle for potential investors will be a tolerance for financial losses in exchange for rapid expansion. Lyft’s net loss reached $911 million last year, and its filing notes “we have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future.” Uber, likewise, has operated at a loss.
As Curbed notes, going public may change that picture for Lyft, which may have to raise prices for customers in order to become profitable for shareholders. The expansion into lower-cost, and more environmentally sustainable, bike and scooter networks may likewise force ride rates to go up. Going public could also invite more scrutiny into how Lyft pays its drivers and its relationships with regulators and transit services in cities.
