
Lyft Files for IPO - svtrent
https://www.reuters.com/article/us-lyft-ipo/ride-hailing-firm-lyft-inc-files-for-ipo-idUSKBN1O51AA
======
the_reformation
The most exciting implication here is that we can finally pour over the
financials of a major ride-hailing company. Whether these companies have the
unit economics to succeed is, remarkably, still an open question.

~~~
dcposch
Sorry to be a grammar right wing populist, but it's "pore over".

To pore is to think deeply about to something, to dwell on it.

A pour-over is a type of coffee.

~~~
liquidise
I'm not sure why you are being down voted. This sounds like it is a surprising
revelation for many, myself included.

~~~
pgrote
I believe it is for "right wing populist" when nazi is usually used with the
grammar phrase.

------
docker_up
From a purely investment point of view, why would anyone invest in Lyft over
Uber? Lyft has a smaller footprint and only operates in the US (except
Toronto). They are more susceptible to economic conditions in a single
country, the US, and every point of marketshare they get is a zero-sum game
against Uber and presumably expensive because Uber won't give it up for free.

Uber has a global operations, is in multiple streams of business and has
diversity across business lines and countries so even if there's a recession
in one country, it might be made up for in other countries.

So what's the investment story then for Lyft?

~~~
benj111
Uber takes the flack, gets the law changed, creates the market. Lyft sails in
and gets most of the benefits, without those costs.

Uber doesn't have a massive moat. Drivers can have both apps, users can have
both apps. You attract drivers by paying them more, you attract riders by
charging them less. Uber for now can afford to beat everyone on both those
fronts, but eventually they will have to start making a profit. When that
happens Lyft is best placed to take advantage.

~~~
stingrae
As a counter point, Lyft was first to create ride sharing. Internationally,
Uber has driven the changes.

~~~
joeblau
Uber (Founded March 2009[1]) created ride sharing in SF before Lyft (Founded:
June 2012[2]). Uber just started with commercially licensed Black Car drivers
and Lyft started with anyone with a car and a drivers license. Then Uber moved
down market with UberX and Lyft moved up market with Lux.

[1] - [https://en.wikipedia.org/wiki/Uber](https://en.wikipedia.org/wiki/Uber)

[2] - [https://en.wikipedia.org/wiki/Lyft](https://en.wikipedia.org/wiki/Lyft)

~~~
jessriedel
I think this is just a matter of semantics. Are you saying we should call a
black-car hailing service "ride sharing" simply because you booked it with a
smart phone app rather than calling a number? (Remember that Uber didn't even
use a novel business relationship; there have long been dispatchers with a
single phone number that distribute the rides to multiple independent black
car agencies.)

To me, the key change deserving a new term was allowing completely
independent, non-professional drivers, and I think Lyft beat Uber to that.
(Heck, some purists would say "ride sharing" should be reserved for cases
where the driver doesn't make an wages, just reimbursement for costs.)

~~~
deepakhj
Sidecar beat both Lyft and Uber with people using their own cars. It launched
in September 2011.

Uber launched UberX in June 2012. Lyft launched in June 2012.

Give Sidecar credit where it's due.

~~~
jessriedel
I'm happy to, and in fact wasn't giving anyone credit for being first. I was
just trying to point out that Lyft beat Uber.

------
lbacaj
I see a lot of comments on here about the efficiency of Lyft/Uber's and lots
of comments about their overspending.

The new book by Reid Hoffman, Blitzscaling, was an eye-opener for me as to how
these companies operate and what seems as incredibly inefficient now will all
be but forgotten tomorrow when they have complete monopolies over all
transportation... The nature of technology makes it winner take all almost
always, it's only a matter of time until they can offer other forms of
transportation to people. Perhaps people someday won't even own any cars at
all especially if it's cheaper to call an autonomous one from your device
whenever you need it.

These are interesting times we are living in and these business models are
completely counterintuitive to traditional norms of taking small risks and
that much is obvious from seeing the business models of Uber/Lyft, WeWork,
Airbnb, etc.

~~~
RandallBrown
Why would ridesharing be winner take all? There's almost no network effect
(beyond splitting the cost, but Venmo has largely solved that) and the drivers
all drive for all of them.

In NYC I think there's at least 4 ridesharing companies and I usually choose
which one based on which one has given me a promo.

~~~
a13n
There are plenty of network effects.

To start a new ridesharing company, you have to get drivers and riders. You'd
have to offer them a ton of incentives to start driving/riding with your
service, when the existing options are well established.

For drivers, Lyft and Uber have incentives (lower fees) if you do the majority
of rides with their service, which incentivizes you to only drive with one
service.

When's the last time you downloaded a new app on your phone? For me it's been
weeks, maybe months. For so many people, it's easier to just not try your new
rideshare service.

~~~
CPLX
This is just not correct.

To start a new ridesharing company all you have to do is attack and carve off
the most profitable element of the big company's product mix.

All you need is to undercut them in certain high profitability routes, like
airport runs, or luxury vehicles for executives, or anything, and you have a
toehold.

There are some positive network effects, but there are also negative network
effects. Having more users doesn't mean you always win as the big company.

For example if you have no customers all you have to do is be outside of a
stadium at the end of a show, or waiting by an airport during a busy landing
period, and have rudimentary abilities to let people know you exist, and
you'll get defectors.

~~~
aeternus
Without a large network, the time for a car to arrive is high and
unpredictable.

This is bad for customers.

~~~
CPLX
Not necessarily.

It's pretty easy to have a network that's not very big that always has someone
at the airport, or always is available for trips that stay within a specific
neighborhood, or can always be arranged with a little more advance notice, or
whatever.

And the relevant part of pointing this out is that as long as that's true,
which is forever, then these large companies will never be able to extract
monopoly pricing.

As soon as they start gouging customers people will immediately flood in to
siphon off the lowest hanging fruit or easiest segments of their customer
base.

That dynamic will never go away, it's not at all clear what the point of all
this buying of market share is, given that it will never be truly defendable.

~~~
ghaff
Yes. You can overprovision in a constrained area and you can also let people
schedule ahead of time. That's pretty much every black car service which often
are not very big companies. But they tend to be relatively expensive. (Which
is fine for some uses; I use one to travel to and from the airport.)

------
Animats
Looking forward to reading the prospectus. Let's see the audited numbers.

A confidential filing with the SEC of an offering is a new thing. Until 2017,
you couldn't do that. It's limiting in some ways. Lyft now can't say anything
more about an IPO. If they do, the confidentiality can disappear.[1]

[1] [https://www.sec.gov/corpfin/voluntary-submission-draft-
regis...](https://www.sec.gov/corpfin/voluntary-submission-draft-registration-
statements-faqs)

------
Tiktaalik
I'm not very bullish on these ride sharing companies in the long term. More
and more data is coming out that suggests that these ride sharing companies
impact transportation and congestion metrics in a negative way that is counter
productive to cities' long term transportation goals. Accordingly cities are
layering on more regulations that will limit what has made these companies
different from traditional taxi companies.

~~~
whoisjuan
"Ride sharing" is not an accurate representation of these companies anymore.
Uber and Lyft are trying to become major mobility and transportation
platforms. The core of their business right now relies on ride-sharing, but if
they want to become sustainable long-term companies they need to evolve their
business. Sadly, drivers are just an input to generate cash flow. They're
definitely not indispensable, especially with new short distance tranportation
solutions like scooters.

~~~
rococode
At this point Uber and Lyft are really just taxi companies with nice apps. Add
the driver reviews, GPS locations, and requesting a ride via an app to a
traditional taxi system and it's the same. The only major advantage they have
right now is that Uber/Lyft are standardized throughout cities and suburbs,
whereas taxi companies are mostly local to one city.

~~~
tomp
The other significant advantage is that they're cheaper. Either because
they're _actually_ cheaper (e.g. in London, black cab drivers have to train to
know every street by heart, whereas Uber drivers can just rely on technology
(Google Maps)), or because Uber subsidizes the passengers, but regardless,
they're _significantly_ cheaper (speaking for London).

~~~
whoisjuan
What is limiting a black cab driver from using Google Maps or Apple Maps or
whatever?

~~~
pradn
Part of the certification to be a black cab driver in London is to take a test
about the streets of the city. Of course, once you pass you may use navigation
apps.

[https://www.nytimes.com/2014/11/10/t-magazine/london-taxi-
te...](https://www.nytimes.com/2014/11/10/t-magazine/london-taxi-test-
knowledge.html)

------
ghaff
Question that's somewhere between rhetorical and semi-serious. At what point
do one of these companies increase their pricing to the point where they can
operate profitably and just let volumes end up wherever they end up (making
whatever cost cuts they need to on the way down)? Presumably there's some
point where you can make money--but maybe not if you have a basically
equivalent competitor who is willing to lose money indefinitely.

~~~
_hardwaregeek
Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all
local taxi services, then fix prices with their competitors and worry about
anti-competitive lawsuits later. Waiting for self driving cars feels like a
fool's errand.

~~~
davio
Taxis are really a short term play. Long term is really transport as a service
- who owns the market when people no longer own cars.

~~~
ghaff
Stipulating that self-driving cars that can operate in dense urban areas in a
wide range of weather conditions will exist some day...

Lots of people are still going to own cars, especially as you get to less
dense areas where parking isn't difficult or expensive and cars are needed on
a daily basis to go places, store things, etc.

What possible advantage, other than fleeting brand recognition, does Lyft or
Uber have in a world where self-driving is a standard car feature? Why
wouldn't Avis, Hertz, National, <insert new or existing fleet management
company here> operate those short-term rentals? Or even the car manufacturers
--although based on past behavior--they probably are primarily interested in
building cars.

~~~
maxxxxx
Exactly. Once self driving cars are there , Uber and Lyft have no advantage
other other companies. Rental car companies actually have experience managing
large fleets which is something Uber and Lyft don't have.

~~~
davio
I worked for one of the rental car companies in this space. They literally
don't have the ability to execute the technology required for this. They are
better at the labor and capital side that the startups don't want to touch.

~~~
ghaff
I don't doubt that's true today. So they either adapt or new entrants displace
them. (This is actually a pretty good example of how all companies are needing
to increasingly become tech companies to at least some degree.)

------
mpweiher
Shrewd move to get it done before Uber.

As many others here have noted (and other disputed) there doesn't seem to be
an actual viable business model here. So there would be a distinct first mover
advantage for getting in your IPO in, lest the other one tank the market for
you as it starts to hit reality, such as actually having to have a sustainable
business no longer fueled almost exclusively by investor money.

~~~
yellow_postit
First mover has to operate in the open while the private company can continue
with increased flexibility that comes from a lack of disclosure. A question I
have for Lyft is why now given the, seeming, lack of a viable biz model?

~~~
ghaff
I think you basically answered your own question. If you assume there really
is no viable business model--and isn't going to be one--why wouldn't you take
what you can while the taking is good before the suckers, excuse me investors,
realize it is all smoke and mirrors? Waiting presupposes either a better exit
in some other form (i.e. acquisition) or improving financials/other business
metrics that let you price higher for an IPO.

ADDED: And as maxxxxx wrote, it seems as if there are a lot of risks for the
general economic picture and I'd expect both Lyft and Uber to be hit pretty
hard in any significant downturn as they're luxury goods to at least some
degree.

------
webninja
I’ll invest in Lyft when it IPOs if the valuation is fair (unlike Snapchat’s
IPO lol) Every dollar Lyft raises in the IPO is an extra dollar it can use
against Uber. Sometimes, the one with the biggest warchest wins.

------
medius
I feel that the time to file for IPO for Lyft and Uber is running out. If
Waymo One starts getting popular and gets more and more into news cycle,
valuations of both of these companies will be considered based on the progress
of self driving cars.

------
spaceflunky
Did anyone here buy $lyft on the secondary markets?

------
wturner
I'm curious what a company like Lyft (or any number of companies that have
grown rapidly due to funding but still seem like they have some kind of
sustainable business model) how they might look as democratically owned
companies (basically a giant coop). Technically their is no reason that the
entire thing can't be owned directly by the drivers, software developers and
legal people with profit sharing and extreme voting. The social scaffolding is
still a radical idea and the cultural assumptions are not crystalized like
dictatorial businesses , but as a general idea it's hard for me not to "feel"
like the democratically owned equivilent to many of these "VC funded"
companies is not the the disruption model to the disruption model. I picture
companies like lyft getting off the ground due to huge influx of investor
money, experimenting, feng shuing out any uneeded clutter and then some
leaner, more organic democratically-owned alternative gradually becoming more
of a norm after the previous iteration did all the experimental work. I kind
of hope that happens - at least as an experiment. If it were successful it
would be funny....and neat. I can dream. :/

~~~
nicetryguy
I'd love to see you start that company :)

------
uptownfunk
Except Uber still works.. fastest tap to ride time I’ve seen across all the
apps.

~~~
sunsetMurk
>fastest tap to ride time

I've never heard that phrase and I like it. I'm sure we'll start to see it
more.

Then, who has the best self driving route/priority for the fastest tap to
destination time :-)

------
PhasmaFelis
Funny that Uber/Lyft get categorized as "ride-hailing" when they specifically
don't allow you to _hail_ a cab, only request one in advance.

But the alternative seems to be "ride-sharing", which is utter feel-good
bullshit outside of the small percentage who use Uber Pool or Lyft Line, so I
suppose it's the best we've got.

~~~
enobrev
I believe the full term is "ride-hailing app[lication]", which does fit these
services, specifically because they can't be used without the apps. I agree
that the shortened version doesn't fit.

------
khazhou
They filed a draft/confidential S-1, so don't bother yet searching for the
document.

------
delta-neutral
I made a video about this HN post, where I'm summarizing the 3 most common
misconceptions that I have identified from this discussion:
[https://youtu.be/Wa9uzVYA4K8](https://youtu.be/Wa9uzVYA4K8)

------
iblaine
If we learned anything from SNAP, it's that investors are still greedy. APPF
is a good example of a recent IPO that has done very well since its IPO date.
IMHO, hyped up companies like Lyft have all the value sucked out before the
IPO.

------
rajacombinator
Reminder this is a direct transfer from your 401k into the pockets of wealthy
VCs.

------
umeshunni
Is there a link to the actual S-1?

edit: No, it looks like they filed confidentially.

------
perlgeek
How unusual is a confidential S-1?

~~~
rayshan
It's becoming more common now with the 2012 JOBs act, which allows companies
to qualify as an Emerging Growth Company (EGC). Companies can then file
confidentially and enjoy some other benefits that lower the IPO barrier.
Here's info from the SEC about the confidential submission process [1]. $1B
revenue is usually the bar to say under to qualify. I built an app to help
startups assess their IPO readiness [2]. If you look under Legal & Compliance
-> SEC -> EGC qualification tracking, it has a bunch of details.

[1]
[https://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfa...](https://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfaq.htm)

[2] [https://ipo-ready.com/#legal-compliance](https://ipo-ready.com/#legal-
compliance)

------
zygotic12
SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.SELL.

------
partingshots
Scramble scramble! Quick, before people realize ridesharing is completely
unsustainable without self driving to take out the cost of human drivers,
except that Lyft is so far behind in the self driving race that they basically
have no way to ever catch up.

------
fjabre
Is there any upside to staying private if you're profitable?

~~~
ForHackernews
You can throw lots of money at kooky, far out bets without having to answer to
shareholders?

~~~
rayvd
No SOX!

------
niyazpk
Is there a way for retail investors to buy shares in companies pre-IPO?

------
ArtWomb
I see tremendous upside getting into either $LYFT below $20B or $UBER at
$120B, which recently announced operational air taxi service by 2023.

~~~
spiderPig
I would rather wait for the Magic carpet service due by 2025.

~~~
sigfubar
And the home teleportation portal announced for 2027. I just hope it doesn't
have too many privacy implications.

~~~
sunsetMurk
Personally, I'm more worried about the potential for a foreign object(eg. a
fly) being present in the booth and becoming merged with myself as part of the
teleportation process. scary stuff!

