As its debut on the public market nears, San Francisco-based Lyft Inc. is trying to chip away at Uber’s majority grip on the nearly $60 billion global rideshare market. Its tactic: discounts.
In the past few weeks, Lyft has heavily increased its rider discounts to as much as one out of three trips, The Information reports. Its bigger rival, Uber Technologies Inc., has plans to follow suit. Yet Lyft’s plan reportedly was a success, with the rideshare company elevating its U.S. market share revenue four points, from 30 percent up to 34 percent, with Uber holding the rest.
Lyft is expected to make the IPO filing as early as this week and list its shares on the Nasdaq near the end of March, according to the Wall Street Journal. And per the Information, the company hopes to raise between $2 billion and $3 billion, upping its valuation to the ballpark of $20 billion to $25 billion. Lyft was last valued at $15.1 billion after a $600 million funding round in June. In comparison, Uber’s post-IPO valuation has been pegged as high as $120 billion. though some estimates put it much lower.
A money-draining strategy to attract customers is nothing new, but Lyft “may face intense questions from investors about how it can hold onto its market share gains without burning through money,” according to the Information. Both Lyft and Uber lost money last year, with Lyft reportedly hemorrhaging $668 million in the first nine months and Uber losing $1.8 billion over the course of 2019.
Founded in 2012 by Logan Green and John Zimmer, Lyft has grown to 3,400 employees, 1,600 of which are located in San Francisco, according to Business Times research.