In its market debut, Lyft counters Uber with 'nice guy' image

In its market debut, Lyft counters Uber with 'nice guy' image

Lyft's IPO sets the stage for the stock market debut of larger rival Uber Technologies, which sources have said is coming in April.

Lyft had little trouble getting investors to hop on board its increasingly popular ride-hailing service, as its initial public offering fetched a $72 per-share price that exceeded even its own expectations. "They could increase revenue by charging more, but that won't be a good thing for passengers, or they could cut the fares for drivers, but that will cause drivers to quit and degrade the service". Indeed, Lyft has acknowledged it may be many more years before it starts making money, especially if its efforts to lower costs by developing a fleet of self-driving cars don't pan out. Expect plenty of drama, from insane highs to deep disappointments, and all kinds of craziness in between featuring some of Silicon Valley's biggest unicorns such as Uber, Slack, Postmates, and Pinterest.

Not even one of Lyft's own drivers who exercised an option to use a $1,000 bonus awarded as part of its IPO to buy stock is convinced the San Francisco company will ever make money.

Anna-Marie Wascher, CEO and founding partner at Flat World Partners, an institutional advisory and asset management firm and early Lyft investor, said market share growth came as "consumers were being more discerning in their choices", and recognizing the gulf in company culture and values between the two firms.

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The stock opened at 87.24, up 21 percent from its offering price of $72, which was better than its initial expected range of $62 to $68. Economists believe growth has slowed this year due to weaker growth prospects in China and Europe, the dampening effects on US exports from the Trump administration's trade battles and the waning boost from the 2017 tax cut and government spending. "That has allowed us to gain the market share that we've gained and [global growth] is a great call option down the road". "The market right now pays more for possibilities than realities". The company also has a network of shared bikes and scooters in various cities, including Los Angeles, Nashville, San Antonio, Chicago and NY.

Interestingly, Tech Crunch notes that Lyft has the largest net losses of any pre-IPO business, posting losses of $911 million on revenues of $2.2 billion past year. Documents show revenues grew sharply from just $343 million (roughly Rs. 2,382 crores) in 2016, but losses widened as well. The company has not laid out a timeline for when it will turn a profit.

Lyft Chairman Sean Aggarwal said on Friday the company will continue to prioritize North American growth over worldwide expansion after completing its IPO. Uber, a global logistics and transportation company most recently valued at $76 billion in the private market, is seeking a valuation as high as $120 billion, although some analysts have pegged its value closer to $100 billion based on selected financial figures it has disclosed.

But luckily for Lyft, Uber has been plagued with controversy over the last few years. So, it's no wonder investors were ready to jump in today after Lyft's March 1 announcement.

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