Let's talk about Lyft.
You likely have used it. You talk about it. And we have all been waiting for it.
I have been on a little bit of a break from the IPO articles but I couldn't pass this one up without saying anything about it. ;) Thank you for all the kind words on my previous IPO articles. It means a lot! Let's get started and talk about Lyft.
Ahhhh Lyft. 99% of you already know who this giant is, but hey, if you don't, this is a safe space to learn! Lyft was started in 2012 and is a "transportation network company" that is based in San Fransisco, California. It's still quite young as far as companies go. Lyft is best known for it's ride sharing, which basically allows any person to become their own taxi and allows users to hail a ride straight from their phone! So how does it work? Basically a "rider" will download the Lyft app, sign-up and input a form of payment into the system. From there, "riders" request a ride from a nearby "driver". The driver will confirm the trip and then will display the drivers name, ratings, and photos of the driver and car for recognition. Sounds, easy right? That's because it is! And that's why people love it.
Lyft makes money, by well, facilitating rides. Let's say you want to become a driver? Once you complete all of the requirements, you are technically a contractor for them, they just provide the platform at which to connect you to customers. Notice they say "Drive With Lyft", not "Drive FOR Lyft."
Lyft drivers don't make a salary or wage per say, but will take home a percentage of all of the rides they provide. Lyft claims that their drivers make around $35 an hour and currently, they will take 20% of the fair. One great difference between Lyft and it's competitors though is that Lyft drivers have the ability to be tipped and keep 100% of the tips given to them! Other ways Lyft makes money is through it's partnerships (such as it's Delta partnership) or through it's new Lyft scooters. WOO! More scooters! :)
Let's talk competitors, aka the elephant in the room. Uber. We all know that name. Lyft and Uber have been battling it out over the last several years and interestingly enough, Uber was actually founded in 2009, 3 years before Lyft. I actually heard of Lyft first, only because I was so confused after seeing all those giant pink mustaches on everybody's cars. I HAD to google what was going on. So which one is better? Well there are a ton of factors go into this. They basically run on the same premise, hailing rides. They have different percentages that they take for rides. And they have a difference in their apps. For rides, you have a load of options for both.
UberX (Economy) – 4-passenger capacity, cars are mostly Toyota Prius and Honda AccordUberXL (Economy) – Can accommodate up to 6 passengers, mostly SUVs and minivans; Costs more than an UberXUberSelect (Economy) – A cheaper alternative for a luxury car service which accommodates up to 4 riders; Cars are usually BMW, Mercedes, Audi and the like, with leather interior.UberBLACK (Premium) – High-end black cars which can accommodate 4 riders.UberSUV (Premium) – Luxury SUVs for a group of 6.UberLUX (Premium) – Stylish, high-end car service available for special occasions.UberPOOL (Carpool) – Split the cost of taking an Uber by sharing the cost with another rider. (https://www.ridester.com/uber-vs-lyft-rider-use/)
Shared Ride, which is not available in all cities, is the cheapest option and will match passengers with other riders if they are going in the same direction.Lyft is the basic and most popular offering that matches passengers with nearby drivers.Lyft XL matches passengers with a vehicle that can seat at least 6 passengers.Lux matches passengers with a luxury vehicle that seats at least 4 passengers.Lux Black matches passengers with a luxury black exterior vehicle ride that seats at least four passengers.Lux Black XL matches passengers with a black exterior luxury that seats up to 6. (i.e.: SUVs with highly rated drivers). (wikipedia)
Making it that for either app you will most likely find a car that works for you or your group. Depending on what times of day you are riding you may find it harder to find a ride from one service in your area than the other. Both services also charge a higher price during certain times of the day. However, Lyft only up charges around 50% while Uber can charge up to 8x regular rate during Surge Hours. Crazy story, I knew a girl who took an Uber ride two New-Year's ago and was charged over $500 for an 9 mile ride. In Nashville! Those Surge charges will get you with Uber. Lyft is also known for having more strict background checks for Drivers than Uber.
As far as trading this puppy. We can definitely find some great places to hop in! In 2018, Lyft made 2.1 billion dollars, more than 6 times it's revenue in 2016 ($343.3 million) and double 2017 (1.06 billion). So all in all, there is a lot of growth happening. There is not much to look at chart wise, but here's a quick video of my boo, doing his thing.
My thoughts, I love the fact that these ride share giants are IPOing. I don't have a particular favorite in the industry and most of my friends are 50/50 on which one they prefer too. I predict that Lyft and Uber will continue to battle it out as they both continue to innovate and change the traveling space as we know it. But long term, I could EASILY see this as a nice investment vehicle, especially for those 30 and under.
Thanks for reading! Until next time!