A lot of news dropped late Thursday/early Friday, including drivers potentially getting stock options from Uber and Lyft. Senior RSG contributor John Ince covers all this news and so much more, including Lyft announcing their IPO ahead of Uber, in this week’s round up.
Uber and Lyft drivers will reportedly get stock in the highly anticipated IPOs [CNBC.com]
Sum and Substance: Uber and Lyft drivers will reportedly get stock in the highly anticipated IPOs
Uber’s plan would give some drivers either a cash bonus or the option to use that money to buy shares at the IPO price, the report says. Lyft, meanwhile, would give drivers with 10,000 rides logged in $1,000 they can keep or use to participate in the company’s IPO. Lyft drivers with at least 20,000 rides would be eligible for $10,000 in cash or a stock equivalent…
More specifically, Uber’s plan would give some drivers either a cash bonus or the option to use that money to buy shares at the IPO price, the report said. Lyft, meanwhile, would give drivers with 10,000 rides logged in $1,000 they can keep or use to participate in the company’s IPO. Lyft drivers with at least 20,000 rides would be eligible for $10,000 in cash or a stock equivalent. …
My Take: Wow. Talk about a blockbuster story. This makes so much sense from so many angles that it’s amazing it took them so long.
It gives the most valued drivers a tangible reward for their years of service. With all the cash these companies have, they can certainly afford it. Of course, questions remain. Which drivers will benefit and which ones will fall below the cut? You can bet there’s going to be some complaining from those who missed out.
But make no mistake about it – this is great news for drivers – and by implication, it’s also a great PR move for the companies. Note: this story broke in the Wall Street Journal, but it sits behind a paywall, so I’ve used the more accessible CNBC.com story for purposes of this roundup.
Lyft kicks off 2019 unicorn IPO spree with public S-1 [Business Insider]
Sum and Substance: Lyft publicly filed its S-1 on Friday to kick off the final sprint of the initial-public-offering process, which could see the ride-hailing startup go public as soon as April. Lyft will list on the Nasdaq under the ticker symbol LYFT, according to the S-1. The S-1 gives us our best look yet at the company’s financials. It saw $2.2 billion in revenue in fiscal 2018, according to the filing…
Lyft didn’t disclose in the filing what price it plans to list at in its initial public offering. The ride-hailing service was last valued at $15 billion in a 2018 funding round, though it is reportedly eyeing a valuation of between $20 billion and $25 billion when it goes public.
… The timing puts Lyft ahead of its ride-hailing rival Uber, which is expected to go public later this year in an IPO that could reportedly value the company at as much as $120 billion.
In its S-1, Lyft disclosed for the first time financials that shed light on its performance. The company saw $2.2 billion in revenue in fiscal 2018, up from $1.1 billion in the year-ago period.
Like many tech unicorns, Lyft still isn’t profitable. The company lost $911.3 million in 2018, up from losses of $688.3 million in 2017 and $682.8 million in 2016.
My Take: The two most noteworthy items in this release were that Lyft now estimates it has 39% of the market. I presume they’re just looking at the United States, but that’s still pretty impressive leap. But at what cost?
That leads to the second item of note – a loss of $911 million – a significant jump from a year ago. Considering that both Uber and Lyft have had over a decade to demonstrate a plausible path to profitability, as a potential investor, I would be very concerned about that number.
Daimler, BMW will invest $1.13 billion in mobility JV to rival Uber [Reuters/Automomotive News]
Sum and Substance: BERLIN — Daimler and BMW unveiled a joint ride-hailing, parking and electric-car charging business on Friday to compete with mobility services provided by Uber and other tech companies.
The automakers said they would invest more than 1 billion euros ($1.13 billion) to expand the joint venture, shifting beyond building and car sales towards pay-per-minute or pay-per-mile systems…
Daimler’s Car2Go car-sharing brand will be combined with BMW’s DriveNow, ParkNow and ChargeNow businesses, with both automakers holding a 50 percent stake in the venture.
The new venture has five strands: ReachNow, a smartphone-based route management and booking service, ChargeNow for electric car charging, FreeNow for taxi ride-hailing, ParkNow for parking services and ShareNow for short-term rental services. “These five services will merge ever more closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously,” said BMW CEO Harald Krueger…
My Take: Yet another competitive threat enters the ridesharing wars. Why? I’m not sure. It just makes the space even less attractive because with more competitors, you have more price cuts. Price cuts are what are killing this industry competitively. Yet execs at the auto companies see a potential $120 billion Uber valuation in an IPO figure and they ask themselves, “Hey, why aren’t we in this business?” So they mobilize their corporate resources and suddenly they’re a player.
Has everybody lost their senses here? Nobody in this space has come close to profitability. But somehow a figure like $120b becomes the benchmark, and then others want in. It’s a weird world out there in ridesharing these days.
What’s more popular than Uber? Shockingly, it’s Jump bikes [Sacramento Bee]
Sum and Substance: When Uber introduced its new Jump bikes in Sacramento last spring, officials figured the flashy red bikes would be a popular complement to their main rideshare auto service, given the capital city’s good weather, flat terrain and general pro-cycling mentality.
But how popular? The answer came as a surprise even to Uber.
An October study found more Sacramentans were renting Jump bikes than using Uber’s car service by a 53 percent to 47 percent margin. That makes Sacramento the first of 16 Uber cities that have both bike and car service where the bikes are more popular, company officials said.
“We were honestly surprised,” said Alex Hagelin, head of Uber’s Jump bike program in Sacramento. “Uber has been around for years, and in just five months, our bikes were generating more trips. This is the first time we have seen this in any of our cities to date.” The results were focused on ridership in Sacramento’s e-bike service area, which covers central Sacramento, part of West Sacramento and Davis. It did not include Uber car rides from Sacramento International Airport.
But it did show Uber officials that they are gaining ground in their effort to broaden their service and to become more environmentally friendly. Uber and other rideshare companies have come under sharp criticism in several major cities for flooding streets with rideshare vehicles that add to urban congestion…
My Take: First, let’s put these figures in perspective. The study was done last October, before the rainy/winter season. I’d be willing to bet that since then, the figures for Jump bikes are way down.
It’s a seasonal business and during the rainy/winter months from November to April, it’s not much of a business at all.
By the way, does anyone know what Jump and the others do during a rainstorm or a blizzard? Do they just leave the bikes out on the streets? Does this damage them? But even with rains, it’s an impressive growth surge – one that I welcome as a non polluting alternative to cars.
Chariot competitor swoops in to fill transit void for Bay Area companies [San Francisco Business Times]
Sum and Substance: An L.A.-based company wants to sell its transit services to enterprise customers in the Bay Area…
Editor’s Note: Pablito is a transportation company for daily commuters and is looking to expand from LA to the Bay Area. With Ford’s Chariot shuttle service exiting several markets around the country, could newcomer Pablito be the one to fill Chariot’s shoes?
Readers, what do you think of this week’s round up?
-John @ RSG
Latest posts by John Ince (see all)
- What Lyft’s IPO is Telling Us About Rideshare - March 23, 2019
- Uber’s Ambitious and Expensive Plan to Get Self-Driving Technology - March 16, 2019
- Does Uber and Lyft Value New or Experienced Drivers More? - March 13, 2019