On Thursday, Lyft made the announcement that a draft registration statement has been confidentially filed with the Securities and Exchange Commission for a public offering that could come next year.
While it is much smaller than Uber, the ride-hailing company’s entry to stock market earlier than the other competing firms will act as a key advantage, said a Wall Street Analyst. Manhattan Venture Partner’s head of research, Santosh Rao, said that Lyft has the benefit of doubt.
People are often confused when it comes to these companies. They don’t know whether to classify it as a software company, a car company or a service. Rao is a late-stage, pre IPO company research specialist and said that it would be best to compare it to the platform companies like Alibaba and Etsy. The fair value of the firm is estimated to be between $19 billion – $20 billion.
Rao further added,
No one knows the exact economics of it. There is a whole range of estimates out there. Some people estimate autonomous vehicles will totally revolutionize the benefit and make 70% of their costs go away, but that is still way out.
Both Lyft and Uber have hundreds of millions of profits. This is, however, not a deal-breaker. There are plenty of public companies that lose money. For instance, Tesla in its recent quarterly earnings report turned a rare profit despite all its years on public exchange.
The Lyft versus Uber battle could be a race of profitability and the race to go public can be ending. Rao said that economics are better for Lyft as it has better PR and profitability is also much closer.
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Source: Business Insider and USA Latest News
