27 ms·

Lyft Files S-1

536 points by jonknee 8y ago

CondensedBrain 8y ago
Some useful numbers from the filing: 1 billion+ cumulative rides. $8.1 billion in bookings in 2018 $2.2 billion revenue in 2018 From risks: >> "We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively."
- xxpor 8y ago
  1 billion rides really doesn't seem that impressive to me given they're a global company.
  - zht 8y ago
    aren't they only in canada and the US
    - AdamSC1 8y ago
      And only a few select cities in Canada.
  - driverdan 8y ago
    Lyft is not a global company. They're only in North America.
    - xxpor 8y ago
      Oh wow. I don't know where I got the idea they were global from then. Thanks for the correction.
jonknee 8y ago
2018 revenue of $2.16B, with a loss of $911.3M. Oof. Though as a passenger I can't say I mind buying $2 bills for $1!
- tomalpha 8y ago
  In terms of scale, these numbers appear to be similar in scale to Uber's quarterly numbers [0] of $2.95B and a loss of $1.07B. (Yes I know I'm off by several hundred million in revenue!) [0] https://www.bloomberg.com/news/articles/2018-11-14/uber-revenue-slows-as-quarterly-loss-surges-to-1-1-billion https://www.bloomberg.com/news/articles/2018-11-14/uber-reve...
- Fordec 8y ago
  20% of Uber's revenue with 50% in losses.[0] I want to see Lyft succeed just to counter Uber, but yeah, those numbers need to be healthier [0] https://www.reuters.com/article/us-uber-results/uber-posts-50-billion-in-annual-bookings-as-profit-remains-elusive-ahead-of-ipo-idUSKCN1Q42CI https://www.reuters.com/article/us-uber-results/uber-posts-5...
  - ngngngng 8y ago
    It really feels like a game of who can lose money the longest.
  - jjeaff 8y ago
    That fully depends on what the losses are. I haven't read their financials, but if the losses are from expansion and other investment but their unit profitability is good, then it's not a problem. They can always pull back on investing in growth just to reap profits.
    - misun78 8y ago
      But this is where their one-trick pony hurts them. Where will growth come from if they stop growing in the one market they're currently in?
- 8y ago
chollida1 8y ago
Some stylized notes: - If they do go public for $20B+ they that would be for more than Twitter and Facebook went public for. Would you really want to own Lyft over FB and TWTR the day they went public? That's a very large ask of the public markets. EDIT To be clear I"m talking about their valuation multiple not the abs valuation. - working with JPMorgan, Credit Suisse and Jefferies. So I guess we know 3 banks who won't be on the Uber IPO. Goldman probably has that locked up - doing a traditional IPO - banks pitching a valuation of $18 to $30 Billion, I believe their last round as at $15.1B - Seems rushed to beat Uber to market, maybe there is only room for 1 hugely money losing, $10B+ ride sharing company? - how do you loose $1B in a year on $2.2B in revenues and ave any concrete plan at all to become profitable? > Lyft generated $563 million in revenue in the third quarter, up from $300 million in the same period a year earlier, a person familiar with the matter said in October. Losses increased to $254 million in the period from $195 million in 2017, the person said. So losses increase as revenue increases, again, what's the profitability plan? I actually have no idea how to value this company? What metrics should we be looking for? How do use future cash flows to evaluate a company when their future cash flows are all negative by even the most optimistic of estimations? - Will be interesting to watch the first 6 months, if things don't go well, Uber could be in for a rough ride on the public markets. Uber has a much more diverse product line, maybe that will be their pitch.. Watch Uber's S1 to see if they promote food delivery, etc over ride sharing. - Part of Uber's pitch may be their stake in Didi ala Yahoo and Alibaba, if that's true - can't find any info yet on how long employee's and investors will be locked up - Lyft has lots of room for international growth as they are only in North America - shareholders with more than 5 percent of stock - Rakuten Europe S.à r.l.with 13.05 percent - General Motors Holdings LLC with 7.76 percent - Fidelity associated entities with 7.71 percent - Andreessen Horowitz associated entities with 6.25 percent - Alphabet Inc. entities with 5.33 percent. - Lyft's founders did negotiate for a special class of stock that gives them 20 votes for each of their shares. Will be interesting to see if they get locked out of indexes for this. Index/ETF flow can be a godsend to management as they tend to be passive and long term holders. - from the S1 "We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively." - will list on Nasdaq under ticker LYFT, sweet ticker!!
cm2012 8y ago
Some notes: - They claim their US ride sharing marketshare is 39% - that seems high to me. - $800 mil in marketing spend in 2018 from $500 mil in 2017 - they say this increase was largely driven by cost of acquiring new drivers. I honestly thought this would be higher as a % of revenue - this topline number also includes spend on promotions/discounts for passengers.
- windyaskew 8y ago
  From this article [1] posted a few days ago, TC says 34% (Uber is at 66%) and that's due to running at a larger loss by offering discounts to riders. Gaining 4% market share is no small feat but doing it by giving discounts isn't exactly a long-term vision. [1]: https://techcrunch.com/2019/02/26/heres-why-youre-getting-all-those-sweet-uber-and-lyft-discounts/ https://techcrunch.com/2019/02/26/heres-why-youre-getting-al...
  - panarky 8y ago
    This is a network game, so market share is everything. Market share means drivers stay busy and make money. Market share means riders don't have to wait a long time. Uber gave massive discounts for a long time to establish their market share, and it suited their long-term vision just fine. Same strategy seems to be working well for Lyft, too.
- panarky 8y ago
  > that seems high to me What data do you have that indicates their market share is overstated?
  - whymauri 8y ago
    Obviously they have no data, it's a hunch they have. This should be clear from how it's stated.
    - panarky 8y ago
      I value informed opinion much more than random anecdotes. I'm hoping there's more to this comment than just "my friends use Uber so it's hard to believe Lyft has 39% market share".
randomacct3847 8y ago
Biggest thing I noticed is that the cofounders only own a little more than 1m shares each, which is less than .5% each! Painful amount of dilution....wow.
- nevir 8y ago
  Might be a conscious choice?
  - randomacct3847 8y ago
    Well yes they chose to dilute themselves every time they accepted a new round of funding, but that is much smaller than I ever imagined
    - toomuchtodo 8y ago
      Anything is better than zero.
  - nemo44x 8y ago
    Conscious in that they had to sell large pieces of the pie to fuel growth with all the cash burn that has entailed.
- beering 8y ago
  Were the cofounders able to cash out shares previously? Maybe they took some chips off the table?
- IAmGarrett 8y ago
  Crunchbase lists 19 funding rounds. They've gone through the ringer.
  - SilasX 8y ago
    Weird, I didn't think they were that cash-starved for most of their history.
us0r 8y ago
>In January 2019, we entered into an addendum to our commercial agreement with AWS, pursuant to which we committed to spend an aggregate of at least $300 million between January 2019 and December 2021 on AWS services. If we fail to meet the minimum purchase commitment during any year, we may be required to pay the difference, which could adversely affect our financial condition and results of operations. Not as bad as snap but what could they possibly be spending $100 million a year on?
- deleted 8y ago
  [deleted]
- oneplane 8y ago
  Even medium retail easily does 10 million per month.
  - oneplane 8y ago
    Not sure what all the downvotes are about, but spending a bunch of money on your (virtual) datacenter isn't a new or strange thing. Whereas Lyft might not spend it on processes that deal with physical products, they do have a much larger amount of connected clients and data processing. While in theory you'd "just need a database and some REST API" it is never as simple as that. Say you have one set of systems for production, you may want one or more duplicates for engineering purposes. And then you'll want tools to managed those systems, and tools to manage those tools. Then there is AAA, versioning and storage, and you'll have some sort of forensic/auditing log. Up to some point, what makes a system expensive isn't the one set of parts that make production, that is just the tip of the iceberg. It's that you need everything else as well. So regardless on whether you are doing a relatively simple service (getting people from A to B), or doing buying, sales and logistics for retail, which isn't rocket science either, you get the same initial cost and overhead.
- bluedino 8y ago
  That would buy a couple racks worth of servers and plenty of ops staff wouldn’t it?
cabaalis 8y ago
> In 2017 and 2018, certain of our named executive officers provided rides to riders using the Lyft platform in a similar manner as other drivers. We believe that these driving activities provide the named executive officers with substantial practical insight into how our platform serves drivers. I thought this was a pretty interesting point. I was about to call it dogfooding but not quite, since it's more of an experience check than a crucial internal usage.
- occamrazor 8y ago
  McDonald's does (or used to?) the same, requiring corporate managers to work in a restaurant at several points in their careers.
  - Declanomous 8y ago
    Still does. I grew up near Oak Brook, IL, which used to have the corporate hq of McDonalds, and still has Hamburger University. I believe every franchisee is required to attend Hamburger U. There are a number of corporate-owned stores in the area where the a lot of the staff is white-collar professionals in training. Those stores are always amazing. In general stores in the Chicagoland region are way better than stores elsewhere, and I think part of this is due to the fact that corporate sends managers around for training here. I didn't understand the "mcflurry machine is broken" meme until I took a road trip. I had a number of horrible experiences, including a 20 minute wait for a mcflurry that ended up having more ice cream on the outside of the cup than the inside.
  - jnaddef 8y ago
    I wish they would require executives to eat their food everyday, in a Super Size Me fashion
    - Consultant32452 8y ago
      This really makes me curious about what is served at the lunch counter at McDonald's corporate headquarters. I used to work at the corporate headquarters of a company that owns several chain restaurants. The cafeteria there didn't have any of the chain food dishes, but was very high quality as far as office cafeterias go. They had a test kitchen there also and sometimes they'd give out free meals of the stuff they were testing.
8ytecoder 8y ago
Obligatory read about Lyft's dual class shares from Matt: https://www.bloomberg.com/opinion/articles/2019-02-12/lyft-doesn-t-need-investors-to-vote https://www.bloomberg.com/opinion/articles/2019-02-12/lyft-d...
morningmoon 8y ago
"We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively."
- AimForTheBushes 8y ago
  Aka let's dump this trash fire on the stock market.
- jandrese 8y ago
  It's pretty impressive that they've managed to lose that much money despite the fact that they are just running a website and an app. Yeah, that's oversimplifying it, but it's not like they own factories or storefronts or need to buy access to expensive services or something. The vast majority of their "employees" are independent contractors with no healthcare or retirement benefits who get paid by the ride (so Lyft doesn't lose out when business is slow). It seems like it should be a license to print money, but somehow they're losing cash hand over fist. Are they subsidizing rides all over the world?
  - eshyong 8y ago
    See some of the AWS fees mentioned in the top comment on this thread. $300MM over 3 years is not a small amount of money. Not to mention the salaries you need to pay to stay competitive in the bay area, they seem to have a sizable headcount (~1600 from a quick google search)
  - vecter 8y ago
    This is just wrong. Lyft has lots of driver hubs and massive costs for local operations and support.
  - deleted 8y ago
    [deleted]
  - freewilly1040 8y ago
    Simple to use != simple to implement.
40acres 8y ago
The prediction was that ride-sharing would become a winner take all market and that Lyft and Uber would fight it out to attrition, but I'm not sure if this is the case. Both of these companies are massive and I don't see one reaching escape velocity to leave the other in the dust. At a point the losses will matter and the realization will need to be had that the other will not die.
- maxxxxx 8y ago
  "winner take all market " This is the wet dream of all tech bubbles. It was the same in the 90s when people said whoever sells dog food online first will win that market and be the leader in perpetuity. Lyft and Uber will be easy to attack by local companies once they have to stop subsidizing their rides and actually run a real business (aka making profit)
  - jrochkind1 8y ago
    That's an amusing example, because it turns out... pretty much only Amazon will sell dog food online. So it maybe WAS a winner-take-all market, but the winner wasn't that winner...
    - maxxxxx 8y ago
      There are tons of dog food sellers online. Chewys, Petco, Petsmart and many others. Amazon is usually more expensive.
- panarky 8y ago
  Friends and family social networking is a winner-take-all market because your friends lock you in. Messaging for gamers a la Discord is a winner-take-all market because fellow gamers lock you in. But from the rider perspective, there's very little lock-in for ride sharing services. Just install a new app and the car shows up. Doesn't matter if your friends use it. There's no moat. Ride-share lock-in is on the provider side. Can they get enough scale to cover entire cities and nations with enough cars that riders don't have to wait? Turns out with a market this big, there's room for two or three players.
trimbo 8y ago
It looks like they spend a bunch of pages on rider retention and gloss over what I think is the primary issue for the gig economy: provider retention. It's just like Groupon, you can't have a good sell-through product indefinitely if the service providers aren't happy and churn at a high rate. Sooo... what's the churn for the drivers?
- smallgovt 8y ago
  Driver churn isn’t important if driverless cars are on the way.
  - trimbo 8y ago
    So you think they'll stay solvent for 25 years?
  - maxxxxx 8y ago
    Then they'll have to learn fleet management which they have no experience in.
- T_D_K 8y ago
  I'm not sure how that's a big deal for Lyft. It seems like a pretty healthy supply and demand curve -- if the number of drivers drops, it becomes more profitable to be a driver. And there's always people looking for supplemental work, who'll go where the money is. I suppose the part I'm missing is the reduction in riders if there's not enough drivers, but that is apparently not a huge issue (according to their rider-retention numbers). Do you disagree?
  - trimbo 8y ago
    Maybe. The churn for Uber is reportedly 96% annually[1]. The Uber booth at the mall is for recruiting drivers, not riders. Ads on the radio are for drivers. And if you look around at what they spend all of this money on, it's incentives and marketing towards drivers (as well as insurance). That's a lot of churn given the loss they're taking on these expenses towards drivers. Re: your other point about demand. A piece of anecdata that weighs on my mind is, 10 years ago, there was some extreme economic disincentive for a cabbie to come to my residential neighborhood. Uber's black car service was a godsend, even though it cost twice the price of a cab. The supply/demand curve made sense, since I was paying more for my sparse neighborhood. Now I get 10x quicker service for half of the cab cost and a quarter or less of the black car cost. Wat. What I want to know is whether this is because there's a supply of 96% of yearly suckers who come to my neighborhood without doing the math like cabbies in 2009? Or is it just that Uber/Lyft is dumping incentives on them? Because my neighborhood hasn't become more dense, and the math got far worse for the driver. I keep wondering what a reversion to this norm means for Uber and Lyft. If drivers have a lot more pricing power through churn, is 2009-cab-refuses-to-come what it looks like? If you can't get a car due to supply constraints, somehow would that be good for these companies? Anyway, it seems like Uber/Lyft pour most of their money into making drivers happy, and yet they fail to keep them on "the platform". I don't know the full ramifications of it, but it seems like a major issue. [1] - https://www.cnbc.com/2017/04/20/only-4-percent-of-uber-drivers-remain-after-a-year-says-report.html https://www.cnbc.com/2017/04/20/only-4-percent-of-uber-drive...
smallgovt 8y ago
For those who can't wait to short Lyft/Uber, on average, it takes 10-12 weeks to hit the markets after the initial S-1.
- usaar333 8y ago
  That's far too slow given that they confidentially filed earlier. e.g. Dropbox (which also confidentially filed earlier) was public 1 month after the public S1. Realistically, Lyft is public by end of April, barring a Box-style pullback
- NittLion78 8y ago
  Isn't the roadshow happening in like 2 weeks? Stocks usually follow right after.
- jypepin 8y ago
  its 10-12 weeks from confidential filing. We can expect the next 2 weeks to be quiet for preparing the roadshow, then 2 weeks on the road then IPO.
econner 8y ago
Nothing like increasing net losses leading up to IPO! 2016 - ($682,794) 2017 - ($688,301) 2018 - ($911,335) As a percentage of revenue though the loss is decreasing, 2016 - 2x 2017 - 0.6x 2018 - 0.45x 2018 revenue was $2.1bn. Since they are a tech company and not a real company they can IPO at 10x revenue so that's ~20bn. Who cares what their margins are.
iblaine 8y ago
As a former engineer at Lyft, looks like my RSUs would be worth ~2x my salary per year. Typical RSU grants are 25% of your salary per year, so those Lyft RSUs would have been a good return. But that's at a $18-25B valuation. I think $15B is more realistic given the losses and most recent round of funding. Lyft is in a tough industry. Kudos to Logan Green for getting this far. Good to see a UCSB alumn do well.
- throwaway-1283 8y ago
  I don't see how these companies will stop losing $1b+ a year each year. The public markets will not be too kind. The end game was supposed to be autonomous taxis (cutting the driver out). I don't see how that's going to happen before they run out of money unless they 1) significantly raise prices or 2) take increasingly bigger cuts from drivers. Personally I will be shorting as soon as I can.
  - BinaryIdiot 8y ago
    Right? Even if autonomous taxis _is_ their endgame, why couldn't companies that actually produce the cars do it cheaper? Almost all of them are heavily investing in it right now, some are even partnering up with companies that know how to do a lot of it. I don't see how this works out for Lyft or Uber. To me it just looks like they'll both eventually run out of money and get squashed. Maybe I'm missing something?
    - SeanAppleby 8y ago
      My thoughts exactly. My understanding is that Tesla plans on including a clause to prevent their autonomous cars from being used on other ridesharing platforms and simultaneously launching their own service. I believe Lyft has significant financial ties with GM, who has Cruise, so maybe they'll be able to navigate it from a partnership angle.
    - webninja 8y ago
      FYI, Toyota bought a 500m stake in Uber. Some of these car companies just consider the internal combustion engine to be their core competency; then just outsource everything else. Usually to India, Japan or H1B bodyshops.
standerman 8y ago
This explains why I have seen such an increase in the number of cars with Lyft lights in their windshield driving around town.
yuvalkarmi 8y ago
Mazel tov! About time :) Congrats to John, Logan, and the entire Lyft family!
apas 8y ago
FWIW, @modestproposal pulled out some interesting nuggets from the S-1 filing and wrote a very interesting thread about some good stuff and some things that raise questions. Worth reading. [1] [1] https://twitter.com/modestproposal1/status/1101542179481288704 https://twitter.com/modestproposal1/status/11015421794812887...
ryougazilla 8y ago
For those interested in modeling out the s1, here is a link to an excel version of all the tables in the s1: https://get.sentieo.com/lyft-ipo/ https://get.sentieo.com/lyft-ipo/
googlemike 8y ago
Uber is kicking their teeth in. I would be very surprised if Lyft is still around in 5 years.
paydirt412 8y ago
As a multimodal platform/TaaS, is Lyft going to enter the urban air mobility space? Uber is already looking into eVTOL and air mobility with their Uber Elevate team. I saw Blade just launched scheduled helicopter flights in the Bay Area. Use my invite code, SF-4DAN98, for early access. Going to try a flight next week to see if it reduces my commute time.
Sebastian_lml 8y ago
Esto es una prueba
eatbitseveryday 8y ago
Why are there missing numbers in the form? For example, the percentage the founders hold, or the number of shares that will be made available?
- richardwhiuk 8y ago
  Some details can be excluded from the public filling and get filled in closer to the IPO date.
ackbar03 8y ago
Aws costs aside, they are being painfully honest in their prospectus https://www.bloomberg.com/news/articles/2019-03-02/lyft-s-risk-factors-are-the-stuff-of-ipo-dreams-bad-ones https://www.bloomberg.com/news/articles/2019-03-02/lyft-s-ri...
- richardwhiuk 8y ago
  You are pretty much required by law to be painfully honest. You are required to disclose anything that you know of that might have a material impact on the shares.
shivkanthb 8y ago
lol same day as uber founding date in 2009

536 points by jonknee 8y ago

Some useful numbers from the filing: 1 billion+ cumulative rides. $8.1 billion in bookings in 2018 $2.2 billion revenue in 2018 From risks: >> "We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively."

xxpor 8y ago
1 billion rides really doesn't seem that impressive to me given they're a global company.
- zht 8y ago
  aren't they only in canada and the US
  - AdamSC1 8y ago
    And only a few select cities in Canada.
- driverdan 8y ago
  Lyft is not a global company. They're only in North America.
  - xxpor 8y ago
    Oh wow. I don't know where I got the idea they were global from then. Thanks for the correction.

jonknee 8y ago

2018 revenue of $2.16B, with a loss of $911.3M. Oof. Though as a passenger I can't say I mind buying $2 bills for $1!

tomalpha 8y ago
In terms of scale, these numbers appear to be similar in scale to Uber's quarterly numbers [0] of $2.95B and a loss of $1.07B. (Yes I know I'm off by several hundred million in revenue!) [0] https://www.bloomberg.com/news/articles/2018-11-14/uber-revenue-slows-as-quarterly-loss-surges-to-1-1-billion https://www.bloomberg.com/news/articles/2018-11-14/uber-reve...
Fordec 8y ago
20% of Uber's revenue with 50% in losses.[0] I want to see Lyft succeed just to counter Uber, but yeah, those numbers need to be healthier [0] https://www.reuters.com/article/us-uber-results/uber-posts-50-billion-in-annual-bookings-as-profit-remains-elusive-ahead-of-ipo-idUSKCN1Q42CI https://www.reuters.com/article/us-uber-results/uber-posts-5...
- ngngngng 8y ago
  It really feels like a game of who can lose money the longest.
- jjeaff 8y ago
  That fully depends on what the losses are. I haven't read their financials, but if the losses are from expansion and other investment but their unit profitability is good, then it's not a problem. They can always pull back on investing in growth just to reap profits.
  - misun78 8y ago
    But this is where their one-trick pony hurts them. Where will growth come from if they stop growing in the one market they're currently in?
8y ago

chollida1 8y ago

Some stylized notes: - If they do go public for $20B+ they that would be for more than Twitter and Facebook went public for. Would you really want to own Lyft over FB and TWTR the day they went public? That's a very large ask of the public markets. EDIT To be clear I"m talking about their valuation multiple not the abs valuation. - working with JPMorgan, Credit Suisse and Jefferies. So I guess we know 3 banks who won't be on the Uber IPO. Goldman probably has that locked up - doing a traditional IPO - banks pitching a valuation of $18 to $30 Billion, I believe their last round as at $15.1B - Seems rushed to beat Uber to market, maybe there is only room for 1 hugely money losing, $10B+ ride sharing company? - how do you loose $1B in a year on $2.2B in revenues and ave any concrete plan at all to become profitable? > Lyft generated $563 million in revenue in the third quarter, up from $300 million in the same period a year earlier, a person familiar with the matter said in October. Losses increased to $254 million in the period from $195 million in 2017, the person said. So losses increase as revenue increases, again, what's the profitability plan? I actually have no idea how to value this company? What metrics should we be looking for? How do use future cash flows to evaluate a company when their future cash flows are all negative by even the most optimistic of estimations? - Will be interesting to watch the first 6 months, if things don't go well, Uber could be in for a rough ride on the public markets. Uber has a much more diverse product line, maybe that will be their pitch.. Watch Uber's S1 to see if they promote food delivery, etc over ride sharing. - Part of Uber's pitch may be their stake in Didi ala Yahoo and Alibaba, if that's true - can't find any info yet on how long employee's and investors will be locked up - Lyft has lots of room for international growth as they are only in North America - shareholders with more than 5 percent of stock - Rakuten Europe S.à r.l.with 13.05 percent - General Motors Holdings LLC with 7.76 percent - Fidelity associated entities with 7.71 percent - Andreessen Horowitz associated entities with 6.25 percent - Alphabet Inc. entities with 5.33 percent. - Lyft's founders did negotiate for a special class of stock that gives them 20 votes for each of their shares. Will be interesting to see if they get locked out of indexes for this. Index/ETF flow can be a godsend to management as they tend to be passive and long term holders. - from the S1 "We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively." - will list on Nasdaq under ticker LYFT, sweet ticker!!

cm2012 8y ago

Some notes: - They claim their US ride sharing marketshare is 39% - that seems high to me. - $800 mil in marketing spend in 2018 from $500 mil in 2017 - they say this increase was largely driven by cost of acquiring new drivers. I honestly thought this would be higher as a % of revenue - this topline number also includes spend on promotions/discounts for passengers.

windyaskew 8y ago
From this article [1] posted a few days ago, TC says 34% (Uber is at 66%) and that's due to running at a larger loss by offering discounts to riders. Gaining 4% market share is no small feat but doing it by giving discounts isn't exactly a long-term vision. [1]: https://techcrunch.com/2019/02/26/heres-why-youre-getting-all-those-sweet-uber-and-lyft-discounts/ https://techcrunch.com/2019/02/26/heres-why-youre-getting-al...
- panarky 8y ago
  This is a network game, so market share is everything. Market share means drivers stay busy and make money. Market share means riders don't have to wait a long time. Uber gave massive discounts for a long time to establish their market share, and it suited their long-term vision just fine. Same strategy seems to be working well for Lyft, too.
panarky 8y ago
> that seems high to me What data do you have that indicates their market share is overstated?
- whymauri 8y ago
  Obviously they have no data, it's a hunch they have. This should be clear from how it's stated.
  - panarky 8y ago
    I value informed opinion much more than random anecdotes. I'm hoping there's more to this comment than just "my friends use Uber so it's hard to believe Lyft has 39% market share".

randomacct3847 8y ago

Biggest thing I noticed is that the cofounders only own a little more than 1m shares each, which is less than .5% each! Painful amount of dilution....wow.

nevir 8y ago
Might be a conscious choice?
- randomacct3847 8y ago
  Well yes they chose to dilute themselves every time they accepted a new round of funding, but that is much smaller than I ever imagined
  - toomuchtodo 8y ago
    Anything is better than zero.
- nemo44x 8y ago
  Conscious in that they had to sell large pieces of the pie to fuel growth with all the cash burn that has entailed.
beering 8y ago
Were the cofounders able to cash out shares previously? Maybe they took some chips off the table?
IAmGarrett 8y ago
Crunchbase lists 19 funding rounds. They've gone through the ringer.
- SilasX 8y ago
  Weird, I didn't think they were that cash-starved for most of their history.

us0r 8y ago

>In January 2019, we entered into an addendum to our commercial agreement with AWS, pursuant to which we committed to spend an aggregate of at least $300 million between January 2019 and December 2021 on AWS services. If we fail to meet the minimum purchase commitment during any year, we may be required to pay the difference, which could adversely affect our financial condition and results of operations. Not as bad as snap but what could they possibly be spending $100 million a year on?

deleted 8y ago
[deleted]
oneplane 8y ago
Even medium retail easily does 10 million per month.
- oneplane 8y ago
  Not sure what all the downvotes are about, but spending a bunch of money on your (virtual) datacenter isn't a new or strange thing. Whereas Lyft might not spend it on processes that deal with physical products, they do have a much larger amount of connected clients and data processing. While in theory you'd "just need a database and some REST API" it is never as simple as that. Say you have one set of systems for production, you may want one or more duplicates for engineering purposes. And then you'll want tools to managed those systems, and tools to manage those tools. Then there is AAA, versioning and storage, and you'll have some sort of forensic/auditing log. Up to some point, what makes a system expensive isn't the one set of parts that make production, that is just the tip of the iceberg. It's that you need everything else as well. So regardless on whether you are doing a relatively simple service (getting people from A to B), or doing buying, sales and logistics for retail, which isn't rocket science either, you get the same initial cost and overhead.
bluedino 8y ago
That would buy a couple racks worth of servers and plenty of ops staff wouldn’t it?

cabaalis 8y ago

> In 2017 and 2018, certain of our named executive officers provided rides to riders using the Lyft platform in a similar manner as other drivers. We believe that these driving activities provide the named executive officers with substantial practical insight into how our platform serves drivers. I thought this was a pretty interesting point. I was about to call it dogfooding but not quite, since it's more of an experience check than a crucial internal usage.

occamrazor 8y ago
McDonald's does (or used to?) the same, requiring corporate managers to work in a restaurant at several points in their careers.
- Declanomous 8y ago
  Still does. I grew up near Oak Brook, IL, which used to have the corporate hq of McDonalds, and still has Hamburger University. I believe every franchisee is required to attend Hamburger U. There are a number of corporate-owned stores in the area where the a lot of the staff is white-collar professionals in training. Those stores are always amazing. In general stores in the Chicagoland region are way better than stores elsewhere, and I think part of this is due to the fact that corporate sends managers around for training here. I didn't understand the "mcflurry machine is broken" meme until I took a road trip. I had a number of horrible experiences, including a 20 minute wait for a mcflurry that ended up having more ice cream on the outside of the cup than the inside.
- jnaddef 8y ago
  I wish they would require executives to eat their food everyday, in a Super Size Me fashion
  - Consultant32452 8y ago
    This really makes me curious about what is served at the lunch counter at McDonald's corporate headquarters. I used to work at the corporate headquarters of a company that owns several chain restaurants. The cafeteria there didn't have any of the chain food dishes, but was very high quality as far as office cafeterias go. They had a test kitchen there also and sometimes they'd give out free meals of the stuff they were testing.

8ytecoder 8y ago

Obligatory read about Lyft's dual class shares from Matt: https://www.bloomberg.com/opinion/articles/2019-02-12/lyft-doesn-t-need-investors-to-vote https://www.bloomberg.com/opinion/articles/2019-02-12/lyft-d...

morningmoon 8y ago

"We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively."

AimForTheBushes 8y ago
Aka let's dump this trash fire on the stock market.
jandrese 8y ago
It's pretty impressive that they've managed to lose that much money despite the fact that they are just running a website and an app. Yeah, that's oversimplifying it, but it's not like they own factories or storefronts or need to buy access to expensive services or something. The vast majority of their "employees" are independent contractors with no healthcare or retirement benefits who get paid by the ride (so Lyft doesn't lose out when business is slow). It seems like it should be a license to print money, but somehow they're losing cash hand over fist. Are they subsidizing rides all over the world?
- eshyong 8y ago
  See some of the AWS fees mentioned in the top comment on this thread. $300MM over 3 years is not a small amount of money. Not to mention the salaries you need to pay to stay competitive in the bay area, they seem to have a sizable headcount (~1600 from a quick google search)
- vecter 8y ago
  This is just wrong. Lyft has lots of driver hubs and massive costs for local operations and support.
- deleted 8y ago
  [deleted]
- freewilly1040 8y ago
  Simple to use != simple to implement.

40acres 8y ago

The prediction was that ride-sharing would become a winner take all market and that Lyft and Uber would fight it out to attrition, but I'm not sure if this is the case. Both of these companies are massive and I don't see one reaching escape velocity to leave the other in the dust. At a point the losses will matter and the realization will need to be had that the other will not die.

maxxxxx 8y ago
"winner take all market " This is the wet dream of all tech bubbles. It was the same in the 90s when people said whoever sells dog food online first will win that market and be the leader in perpetuity. Lyft and Uber will be easy to attack by local companies once they have to stop subsidizing their rides and actually run a real business (aka making profit)
- jrochkind1 8y ago
  That's an amusing example, because it turns out... pretty much only Amazon will sell dog food online. So it maybe WAS a winner-take-all market, but the winner wasn't that winner...
  - maxxxxx 8y ago
    There are tons of dog food sellers online. Chewys, Petco, Petsmart and many others. Amazon is usually more expensive.
panarky 8y ago
Friends and family social networking is a winner-take-all market because your friends lock you in. Messaging for gamers a la Discord is a winner-take-all market because fellow gamers lock you in. But from the rider perspective, there's very little lock-in for ride sharing services. Just install a new app and the car shows up. Doesn't matter if your friends use it. There's no moat. Ride-share lock-in is on the provider side. Can they get enough scale to cover entire cities and nations with enough cars that riders don't have to wait? Turns out with a market this big, there's room for two or three players.

trimbo 8y ago

It looks like they spend a bunch of pages on rider retention and gloss over what I think is the primary issue for the gig economy: provider retention. It's just like Groupon, you can't have a good sell-through product indefinitely if the service providers aren't happy and churn at a high rate. Sooo... what's the churn for the drivers?

smallgovt 8y ago
Driver churn isn’t important if driverless cars are on the way.
- trimbo 8y ago
  So you think they'll stay solvent for 25 years?
- maxxxxx 8y ago
  Then they'll have to learn fleet management which they have no experience in.
T_D_K 8y ago
I'm not sure how that's a big deal for Lyft. It seems like a pretty healthy supply and demand curve -- if the number of drivers drops, it becomes more profitable to be a driver. And there's always people looking for supplemental work, who'll go where the money is. I suppose the part I'm missing is the reduction in riders if there's not enough drivers, but that is apparently not a huge issue (according to their rider-retention numbers). Do you disagree?
- trimbo 8y ago
  Maybe. The churn for Uber is reportedly 96% annually[1]. The Uber booth at the mall is for recruiting drivers, not riders. Ads on the radio are for drivers. And if you look around at what they spend all of this money on, it's incentives and marketing towards drivers (as well as insurance). That's a lot of churn given the loss they're taking on these expenses towards drivers. Re: your other point about demand. A piece of anecdata that weighs on my mind is, 10 years ago, there was some extreme economic disincentive for a cabbie to come to my residential neighborhood. Uber's black car service was a godsend, even though it cost twice the price of a cab. The supply/demand curve made sense, since I was paying more for my sparse neighborhood. Now I get 10x quicker service for half of the cab cost and a quarter or less of the black car cost. Wat. What I want to know is whether this is because there's a supply of 96% of yearly suckers who come to my neighborhood without doing the math like cabbies in 2009? Or is it just that Uber/Lyft is dumping incentives on them? Because my neighborhood hasn't become more dense, and the math got far worse for the driver. I keep wondering what a reversion to this norm means for Uber and Lyft. If drivers have a lot more pricing power through churn, is 2009-cab-refuses-to-come what it looks like? If you can't get a car due to supply constraints, somehow would that be good for these companies? Anyway, it seems like Uber/Lyft pour most of their money into making drivers happy, and yet they fail to keep them on "the platform". I don't know the full ramifications of it, but it seems like a major issue. [1] - https://www.cnbc.com/2017/04/20/only-4-percent-of-uber-drivers-remain-after-a-year-says-report.html https://www.cnbc.com/2017/04/20/only-4-percent-of-uber-drive...

smallgovt 8y ago

For those who can't wait to short Lyft/Uber, on average, it takes 10-12 weeks to hit the markets after the initial S-1.

usaar333 8y ago
That's far too slow given that they confidentially filed earlier. e.g. Dropbox (which also confidentially filed earlier) was public 1 month after the public S1. Realistically, Lyft is public by end of April, barring a Box-style pullback
NittLion78 8y ago
Isn't the roadshow happening in like 2 weeks? Stocks usually follow right after.
jypepin 8y ago
its 10-12 weeks from confidential filing. We can expect the next 2 weeks to be quiet for preparing the roadshow, then 2 weeks on the road then IPO.

econner 8y ago

Nothing like increasing net losses leading up to IPO! 2016 - ($682,794) 2017 - ($688,301) 2018 - ($911,335) As a percentage of revenue though the loss is decreasing, 2016 - 2x 2017 - 0.6x 2018 - 0.45x 2018 revenue was $2.1bn. Since they are a tech company and not a real company they can IPO at 10x revenue so that's ~20bn. Who cares what their margins are.

iblaine 8y ago

As a former engineer at Lyft, looks like my RSUs would be worth ~2x my salary per year. Typical RSU grants are 25% of your salary per year, so those Lyft RSUs would have been a good return. But that's at a $18-25B valuation. I think $15B is more realistic given the losses and most recent round of funding. Lyft is in a tough industry. Kudos to Logan Green for getting this far. Good to see a UCSB alumn do well.

throwaway-1283 8y ago
I don't see how these companies will stop losing $1b+ a year each year. The public markets will not be too kind. The end game was supposed to be autonomous taxis (cutting the driver out). I don't see how that's going to happen before they run out of money unless they 1) significantly raise prices or 2) take increasingly bigger cuts from drivers. Personally I will be shorting as soon as I can.
- BinaryIdiot 8y ago
  Right? Even if autonomous taxis _is_ their endgame, why couldn't companies that actually produce the cars do it cheaper? Almost all of them are heavily investing in it right now, some are even partnering up with companies that know how to do a lot of it. I don't see how this works out for Lyft or Uber. To me it just looks like they'll both eventually run out of money and get squashed. Maybe I'm missing something?
  - SeanAppleby 8y ago
    My thoughts exactly. My understanding is that Tesla plans on including a clause to prevent their autonomous cars from being used on other ridesharing platforms and simultaneously launching their own service. I believe Lyft has significant financial ties with GM, who has Cruise, so maybe they'll be able to navigate it from a partnership angle.
  - webninja 8y ago
    FYI, Toyota bought a 500m stake in Uber. Some of these car companies just consider the internal combustion engine to be their core competency; then just outsource everything else. Usually to India, Japan or H1B bodyshops.

standerman 8y ago

This explains why I have seen such an increase in the number of cars with Lyft lights in their windshield driving around town.

yuvalkarmi 8y ago

Mazel tov! About time :) Congrats to John, Logan, and the entire Lyft family!

apas 8y ago

FWIW, @modestproposal pulled out some interesting nuggets from the S-1 filing and wrote a very interesting thread about some good stuff and some things that raise questions. Worth reading. [1] [1] https://twitter.com/modestproposal1/status/1101542179481288704 https://twitter.com/modestproposal1/status/11015421794812887...

ryougazilla 8y ago

For those interested in modeling out the s1, here is a link to an excel version of all the tables in the s1: https://get.sentieo.com/lyft-ipo/ https://get.sentieo.com/lyft-ipo/

googlemike 8y ago

Uber is kicking their teeth in. I would be very surprised if Lyft is still around in 5 years.

paydirt412 8y ago

As a multimodal platform/TaaS, is Lyft going to enter the urban air mobility space? Uber is already looking into eVTOL and air mobility with their Uber Elevate team. I saw Blade just launched scheduled helicopter flights in the Bay Area. Use my invite code, SF-4DAN98, for early access. Going to try a flight next week to see if it reduces my commute time.

Sebastian_lml 8y ago

Esto es una prueba

eatbitseveryday 8y ago

Why are there missing numbers in the form? For example, the percentage the founders hold, or the number of shares that will be made available?

richardwhiuk 8y ago
Some details can be excluded from the public filling and get filled in closer to the IPO date.

ackbar03 8y ago

Aws costs aside, they are being painfully honest in their prospectus https://www.bloomberg.com/news/articles/2019-03-02/lyft-s-risk-factors-are-the-stuff-of-ipo-dreams-bad-ones https://www.bloomberg.com/news/articles/2019-03-02/lyft-s-ri...

richardwhiuk 8y ago
You are pretty much required by law to be painfully honest. You are required to disclose anything that you know of that might have a material impact on the shares.

shivkanthb 8y ago

lol same day as uber founding date in 2009