Several months ago, Lyft, a popular ride-hailing company, announced their selection of JPMorgan Chase & Co. as the “lead underwriter of its initial public offering along with Credit Suisse Group and Jefferies Group, the WSJ reported. The company, last valued at approximately $15 billion, laying the groundwork for their initial public offering (IPO) ahead of their biggest rival, Uber, who plans on pursuing an IPO sometime next year. Since its inception, Lyft has played a massive game of catch-up in a market dominated on all fronts by Uber Technologies. While both companies have emerged as the leading brands in the ride-hailing industry, Lyft has historically ridden in the back seat, with Uber confidently at the wheel, touting a potential $120 billion valuation.
Lyft announced their plans to beat Uber to market, by filing paperwork with the Securities and Exchange Commission for an IPO on Thursday:
“…Lyft has confidentially submitted a draft registration statement…with the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock. The number off shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions.”
–Lyft Press Release Regarding IPO Filing
Lyft’s filing with the SEC on Thursday not only indicates to potential investors that the company is ready to take their company to the next level but more than that, Lyft’s executives recognized the cruciality of at least preparing to go public ahead of Uber. If Lyft proceeds with their initial public offering, they will be the first ride-hailing company available for public investors, and how they perform on the market will be an indication of where the fast-growing industry is headed overall. While Uber, Lyft, and several other ride-hailing startups have gathered vast amounts of funding from venture capital firms, no such company has dared go public.
As exciting as Lyft’s IPO may be, several analysts, including Jay Ritter, an IPO expert and professor at the University of Florida, believe that the current state of the stock market, weakened after months of trade tensions between the United States and China, could dampen the excitement for offerings from Lyft and, eventually, Uber.
“Market decline means that the offer price will be lower than otherwise. But there’s a danger of waiting to go public as well — markets could go even lower, and the companies could raise less money if they waited longer.”
–Jay Ritter
In anticipation of going public, both Lyft and Uber have invested capital in the widely successful sub-sect of the ride-hailing industry; scooter-sharing. About a year ago, two companies — Bird and Lime — began leaving their motorized scooters on city streets and sidewalks, meant for people with each company’s respective smartphone app to unlock and ride off into the sunset. The ‘micromobility’ industry, as its come to be called, has inspired a myriad of bike/scooter-sharing startups, purposed with championing vehicular options for ‘last-mile’ transportation. Several months ago, Uber caught on to the emerging industry and spent $200 million on acquiring the bike-sharing startup Jump, which has since released its own line of electric scooters.
Lyft isn’t oblivious to the success of the micromobiity industry in the slightest. Several days ago, the company announced plans to set loose its own fleet of Lyft scooters in Austin, Texas, representing the company’s fifth scooter launch of the year, according to their website.
“This summer, we mapped out our vision for how Lyft bikes & scooters will reduce the number of vehicle miles traveled, increase public transportation trips, and provide equitable tranpsoration solutions. In Austin, we have a trio of partnerships to announce as our scooters launch on your streets.”
–Lyft Press Release December 4, 2018
