Lyft, Uber’s fiercest rival on home turf, has filed for an initial public offering of shares with the US Securities and Exchange Commission, becoming the first app-based taxi, and beating Uber, to do so.
The said IPO, which may open in the first quarter of 2019, has far reaching consequences for the entire sector. No one is sure of the future of Internet-based taxi services which have guzzled billions over billions of dollars but haven’t delivered profits. Analysts and observers are skeptical that participants would ever be able to tune the business to a sustainable business model.
Lyft, the number 2 taxi service in the US, started in 2012 and has been launched in Canada recently. The firm was valued at $15.1 billion in its last funding round and may be valued at $20-$30 billion, Reuters reported citing sources. Lyft hasn’t disclosed the number of shares, or their value, it will sell.
Uber is also gearing up for an IPO and is seeking a valuation of $100 billion, a mammoth amount by any IPO standard, Financial Times reported. The plans are on hold as Uber is testing the interest and appetite of public market investors in ride-hailing.
Uber, credited for creating internet taxi as a space and inspiring Me Too’s around the world, is almost 10 years old, and some of its investors are craving for returns. Early this year, Uber installed Dara Khosrowshahi as the CEO to focus on profits and restore the company’s public image.
Over the last two years, regional rivals — like Ola in India, Didi Chuxing in China, and Go-Jek and Grab in South East Asia (SEA) — have grown in size and marketshare, forcing Uber to burn more money in discounts to retain divers and riders.
This has led Uber to sell its operations to local rivals in China, Russia and the SEA. If reports are to go by, the same could be the case in India.