Lyft

Lyft Expected To Turn a Profit By 2021: Stock Rallies

August 27, 2019 By Amanda Blankenship Leave a Comment

Shares of Lyft IPO increased on Monday after analysts predicted a Lyft profit by 2021, compared to the initial prediction of 2023. This made shares of the company jump by 4.3 percent.

Lyft Profit Predictions

The analysts’ report helped ease some of the concerns of interested investors because, since debuting on the market, Lyft has sustained some pretty serious losses. Shares have fallen almost 30 percent since March. On top of that, Lyft has not proven itself reliable when it comes to competing with Uber and other rivals. These factors led analysts to believe it would be 2023 before the company saw a profit.

Lyft, however, has stepped up and begun making an effort to profit sooner rather than later. Lyft Financial Chief Brian Roberts mentioned fare increases in certain cities in June. There has been no further information regarding how much fares were increased or where though.

Analysts predict the company’s annual losses will decrease in the next few years. Predictions state that losses will go from $911 million this year down to $24 million by 2024.

“We are raising estimates, putting us significantly ahead of consensus,” the report stated. “The main driver is assumed price increases, with limited impact on demand.” Lyft executives have a target price on shares of $60. It closed at $51.21 on Monday.

Lyft and Uber Controversies

Surprisingly, Uber isn’t doing much better in the market. Shares are down 26 percent since May (compared to Lyft’s 30 percent decrease). Both companies are having issues with transparency since going public though.

Mainly, people are concerned about ride-sharing safety as well as the rights of individuals driving for Uber and Lyft. Both have begun to take a larger portion of each driver’s fare in recent years. Neither company has reported accurate earnings from this. Jalopnik surveyed Uber and Lyft drivers to see how much they’re really taking.

According to the drivers, Uber is keeping about 35 percent of every fare. Lyft keeps around 38 percent. Neither claimed those numbers in public reports. Uber claimed to only take 19 percent, while Lyft does not publicly share their rates at all. That’s not to say you can’t make decent cash with these ride-sharing apps (see video below).

Despite these controversies, both companies are excelling. Millions of people use Uber and Lyft daily. While the apps aren’t going anywhere, it will be interesting to see how these IPOs perform in the near future.

Readers, what do you think about Lyft profit potential? Will the company see profit before it sinks on the market?

Beyond Lyft: IPOs to Watch for in 2019

April 17, 2019 By Kathryn Vercillo Leave a Comment

Watching the Lyft IPO and its effect on the market has been fascinating. It was the first ride-hailing app to go public, which it did in late March. Initially, everything looked great. The company had ambitiously priced its IPO at $72 per share. Right after the launch, shares soared to $87.24. This meant that the company’s valuation was nearly $30 billion, a surprisingly huge amount.

However, in just the short weeks since that launch, Lyft’s value has dropped considerably. In fact, the drop happened fast. Shares fell below IPO price by the second day of trading. By April 15th, they were down to just $56.57 per share. That’s a 27% decline from the close of the first day of trading. Moreover, it’s 35% below that opening price of $87.24. Watching this saga has everyone curious about what’s going to happen with all of the other big IPOs set to happen in 2019. In particular, market analysts can’t stop making predictions about Uber.

What Will Happen When Uber Goes Public?

Lyft beat competitor Uber to the public offering. However, Uber is poised for its launch. People everywhere are speculating on what will happen with Uber’s IPO. Moreover, there are diverse opinions about how Uber’s launch will affect Lyft’s value. Uber is a bigger company with about five times the revenue of Lyft. It’s expected to open to the public at about that same ratio, with a valuation of around $100 billion or about $95 per share.

Most market analysts seem to expect Uber to follow a similar trajectory, starting off really strong but then fading quickly in terms of value share. However, some analysts are already coming out to say that Uber isn’t worth nearly as much as that projected launch number. CNBC reports that valuation expert Aswath Damodaran values the company at somewhere between $58 and $62 billion or between $51 and $54 per share. Moreover, initial investors may be more cautious after seeing the early days of Lyft’s IPO.

Uber has a lot working against the company. They continue to face a variety of legal battles. Recently several women have come forward with frightening tales of sexual harassment/ assault from their drivers. Moreover, they’ve reported that the only help the rideshare has given them is a $5 credit for the “trouble.” Uber tried hard to turn its image around with its new CEO, but it’s just not working quite as expected. Moreover, in addition to the legal troubles, Uber still isn’t a profitable company.

What Will Happen to Lyft with Uber IPO?

Lyft is a smaller company. It tends to have a better reputation than Uber, although it’s had its problems over time. The company recently had to pull many of its electric bikes out of service after reports of potential brake problems. That said, it’ll be interesting to see the effect that Uber’s IPO has on Lyft shares. Some people say that Lyft’s stocks may improve once Uber launches.

It really depends on what Lyft does shortly and how the public perceives its changes. They’re expected to launch their version of Uber Eats, which could increase their value considerably. Likewise, they’re making headway with driverless cars, which may or may not lead to improved profitability in the future. It’s hard to say which company will dominate the industry in the years to come, even though Uber is the bigger company at this time. Therefore, if you have shares in Lyft, you just might want to hang on to them.

More IPOs to Watch for in 2019

Lyft and Uber drew a lot of attention for their public offerings this year. After all, they were in a race to go public first. They’re natural competitors in a market where no other similar competitors really exist, let alone have gone public. Therefore, all eyes have been on them. However, there are a lot of other big IPOs to watch for this year. Although, with Lyft’s IPO struggles, along with other changes in the marketplace, there has been a delay of many of the IPOs anticipated for the year.

Will Airbnb Go Public?

In the frenzy of news about big companies going public in 2019, Airbnb was on everyone’s radar. However, as we have gotten a little bit further into the year, it’s become increasingly unclear whether or not they’ll have a 2019 IPO after all. Recode points out that the company hasn’t gotten any investment money in more than two years, which is a long time for a Silicon Valley startup. Therefore, interested investors have to carefully eye everything they can find out about the company’s financials.

Airbnb recently sold common stock at a price that would value the company at about $35 billion. However, the share value is unclear if they go public. Forbes reports that Wealthfront CEO Andy Rachleff accepts a current market valuation of $31 billion for Airbnb. Nasdaq reports that Airbnb has made some key acquisitions in the buildup to their IPO. Nevertheless, the company says that while they may go public before year’s end, it doesn’t necessarily mean that they will do so. Therefore, this remains one to keep an eye on.

Slack Will Go Public with a Direct Listing of Shares

If you work in the Bay Area, you’ve almost certainly used Slack to communicate with coworkers. Of course, people use it elsewhere as well, but it’s become particularly popular in the Bay Area. Email is out. Slack is in. So it’s no surprise that the company plans to go public.

Slack isn’t planning the usual IPO though. Instead, they plan to directly list their shares on the New York Stock Exchange. It’s not a common approach for startups going public. However, Spotify successfully used this approach when they went public. Most likely, Slack will go public this summer.

Bloomberg reports that in advance of that, investors are betting big on Slack’s value. During the company’s last fundraising round in August, the company had a value of approximately $7 billion. Investors are currently paying between $24 and $27 per share, which places valuation closer to $16 billion. Notably, high prices like that don’t always translate to a high value when the company goes public. Again, this will be an interesting one to watch.

Pinterest Manages IPO Expectations

Pinterest is a popular company. In certain niches, if you don’t have a Pinterest account, then you can’t effectively market your business. However, The New York Times reports that the company is working to manage expectations in advance of going public. Pinterest conservatively priced shares at $15 – $17. This gives the company a valuation of around $11 billion.

High Hopes for Palantir IPO

Peter Thiel is no stranger to making money from startups. His data mining company Palantir is no exception. Although it’s not as flashy as Airbnb or Uber in the public’s mind, it just might be the best IPO to invest in this year. For one thing, the company just won one of its biggest contracts ever, beating out Raytheon for an $800 million military contract. The company works with at least 12 differentl government agencies, which bodes well for its continuing value.

Palantir is frequently listed with a valuation of $20 billion. However, that amount is from a 2015 funding round. It’s no small valuation, but Bloomberg reports that it could be less than half of the company’s actual valuation. That $41 billion valuation came even before the news about that huge military contract.

Other IPOs to Keep an Eye on in 2019

Uber, Airbnb, Slack, Pinterest, and Palantir are the companies you’ll definitely want to keep an eye on as they go public. However, you might also want to follow IPO news about:

PagerDuty and Zoom are both going public before Easter.
Stock-trading app Robinhood is looking good for a 2019 IPO.
Postmates has increased marketing efforts in advance of a likely IPO.
Beyond Meat is likely to be the first plant-based “meat” maker to go public.
Dating app Bumble hopes to get an edge up on competitor Tinder by going public but has not set an IPO date.
Cloudfire was expected to go public this year, but a new round of funding may push that back.
WeWork was a highly anticipated 2019 IPO, but a big drop in value may delay them from going public.

Warren Buffett Isn’t Buying Lyft IPO Stock, Should You?

March 30, 2019 By Amanda Blankenship Leave a Comment

The ride-sharing service Lyft went public on Friday. At the end of the day, the company saw 9 percent growth. However, financial tycoon Warren Buffett won’t be investing in Lyft IPO. Here’s why.

Lyft Goes Public

Logan Green and John Zimmer, co-founders of Lyft, celebrated the company’s IPO on Friday. Lyft went public at $72 per share and reached $87.24 a share at its peak Friday. The stock closed the day at $78.29 per share.

Thursday evening, Lyft raised about $2.3 billion before its debut on the NASDAQ. The Lyft IPO had an initial market cap of $24 billion (up exponentially from its previous valuation of $15.1 billion). The co-founders opted to host the IPO in Los Angeles, which happens to be the company’s largest market.

“We want to make a point that you can both invest in communities and build a great business,” Zimmer said. “It was fun to ring the bell with several members of our driver community and have many of them participate in our IPO because we gave them a bonus to do so.”

Lyft’s co-founders discussed the company’s long-term prospects on Friday. Green and Zimmer are looking forward to autonomous cars, international growth, insurance, and even changing the future of car ownership.

“We are confident that the business will be very profitable,” Green stated. “We are making tremendous progress going after this once-in-a-generation shift where this entire industry, a $1.2 trillion market, could flip from an ownership model to a service model and we are leading the way there.” But, should you consider investing?

Why Warren Buffett Won’t Be Investing in Lyft IPO

When it comes to where you put your money in the stock market, many people look to Warren Buffett for advice. After all, he is one of the most successful investors of all time. However, when it comes to Lyft IPO, Buffett is a hard pass.

In fact, Buffett hasn’t invested in an IPO in 64 years. The only time he did was in 1955. “A gasoline dealer was running it and as a favor gave me 100 shares. And I have to admit it now, I think the statute of limitations has expired, I took a free ride on 100 shares and made $500 and that’s the only time I’ve ever done that,” Buffett said.

Buffett also doesn’t see the value in investing in Lyft itself. “I certainly wouldn’t buy a business for $25 billion,” Buffett stated. “So I look at what I’m getting as a part owner of a business, and I don’t know why, with all the things you can buy for $25 billion in this world, that you would pick a business that really has to be earning $2.5 or $3 billion pre-tax in five years to even be on the same radar screen as things you can buy right now.”

Should You Invest in an IPO?

This year has already proven to be an exciting one where IPOs are concerned. However, Buffett warns against putting any money into them. “I think buying new offerings during hot periods in the market, I don’t think it’s anything that the average person should think about at all,” he said.

If you have FOMO (fear of missing out), keep in mind this sage advice from the seasoned investor. “You can go around making dumb bets and win. It’s not something you want to take as a lifetime policy, though.”

All in all, before you make any investments decision, be sure to do your research and be sure you’re making the right decision for your financial goals.

Readers, are you planning on investing in the Lyft IPO?

Photo: JD Lasica

What Are the Car Requirements for Lyft Plus?

February 6, 2019 By Tamila McDonald Leave a Comment

Lyft has multiple tiers for the company’s rideshare service. Along with basic Lyft, there is Lyft XL (formerly Lyft Plus), Lyft Lux, and Lyft Lux Black. By having a vehicle that qualifies for one of the categories beyond the basic Lyft, drivers can earn more for each trip. However, not every vehicle is eligible. Here is what you need to know about Lyft XL.

Car Requirements for Lyft Plus / Lyft XL

The vehicle requirements for Lyft XL are pretty simple. First, your vehicle must have at least four doors, not including jump doors. Second, you need to have at least six passenger seats available – a minimum of seven total, as you would need one for a driver. Usually, this means a car will not qualify. Instead, you would need to drive a minivan, SUV, or something similar.

Additionally, there are vehicle age requirements, though they vary by location. Here is an overview of the vehicle age requirements, based on the state:

Alabama – 2004 or newer
Alaska – 2007 or newer
Arizona – 2003 or newer (2005 or newer for Eastern Arizona, Lake Havasu City/Kingman, Northern Arizona, Yuma)
Arkansas – 2003 or newer (2005 or newer for Fayetteville)
California 2003 or newer (2005 or newer for Bakersfield, Eastern Sierras, Fresno, Inland Empire/San Bernardino, Lake Tahoe, Los Angeles, Modesto, Monterey, Napa & Sonoma, Orange County, Sacramento, San Diego, Santa Barbara, Santa Cruz, Stockton, Ventura; 2004 or newer for San Francisco, Silicon Valley/San Jose)
Colorado – 2004 or newer
Connecticut – 2007 or newer
Delaware – 2003 or newer
Florida – 2003 or newer (2007 or newer for Bradenton, Jacksonville, Miami/South FL, Naples, Orlando, Port of Charlotte, Sarasota, Tampa; 2004 or newer for Daytona Beach, Florida Keys, Fort Myers, Lakeland, Ocala, Port St. Lucie)
Georgia – 2007 or newer
Hawaii – 2003 or newer
Idaho – 2005 or newer for Coeur d’Alene, Idaho Falls; 2004 or newer for Boise
Illinois – 2003 or newer (2004 or newer for Chicago; 2009 or newer for Bloomington; 2005 or newer for Decatur, Kankakee)
Indiana – 2003 or newer (2005 or newer for Gary, Muncie, Terre Haute)
Iowa – 2003 or newer
Kansas – 2003 or newer (2005 or newer for Manhattan, Topeka, Western Kansas)
Kentucky – 2003 or newer
Louisiana – 2003 or newer (2011 or newer for New Orleans; 2006 or newer for Baton Rouge; 2005 or newer for Monroe)
Maine – 2004 or newer
Maryland – 2007 or newer
Massachusetts – 2003 or newer (2004 or newer for Cape Cod, Springfield, Worcester)
Michigan – 2006 or newer
Minnesota – 2003 or newer (2004 or newer for Minneapolis/St. Paul, though 2008 or older vehicles much has less than 150,000 miles on them; 2009 or newer for Duluth)
Mississippi – 2003 or newer (2005 or newer for Gulfport-Biloxi)
Missouri – 2003 or newer (2007 or newer for St. Louis; 2005 or newer for Springfield)
Montana – 2004 or newer
Nebraska – 2003 or newer (2005 or newer for Western Nebraska)
Nevada – 2003 or newer (2009 or newer for Las Vegas Area)
New Hampshire – 2003 or newer
New Jersey – 2004 or newer
New Mexico – 2003 or newer (2005 or newer for Las Cruces, Roswell, Taos)
New York – 2004 or newer (All NYC vehicles requirements are governed by the city’s Taxi and Limousine Commission)
North Carolina – 2003 or newer (2005 or newer for Outer Banks)
North Dakota – 2003 or newer
Ohio – 2003 or newer
Oklahoma – 2003 or newer (2009 or newer for Ardmore, Woodward)
Oregon – 2004 or newer (2009 or newer for Portland; 2003 or newer for Medford)
Pennsylvania – 2004 or newer, and fewer than 350,000 miles
Rhode Island – 2004 or newer
South Carolina – 2003 or newer
South Dakota – 2009 or newer
Tennessee – 2003 or newer (2005 or newer for Cookeville, Jackson, Johnson City)
Texas – 2003 or newer (2005 or newer for Abilene, Amarillo, Tyler, Victoria)
Utah – 2005 or newer
Vermont – 2009 or newer
Virginia – 2003 or newer (2005 or newer for Fredericksburg)
Washington – 2004 or newer (2009 or newer for King County/Seattle/Tacoma, Olympia)
Washington DC – 2009 or newer
West Virginia – 2003 or newer (2005 or newer for Martinsburg)
Wisconsin – 2003 or newer (2004 or newer for Green Bay; 2005 or newer for Janesville, Madison, Milwaukee, Sheboygan-Fond du Lac Area)
Wyoming – 2005 or newer

It’s important to note that these requirements may change. States may alter the oldest model year that is acceptable, potentially annually, to keep the maximum age in line with their standards.

Additionally, the Lyft Lux Black XL program has additional requirements. Namely, that the vehicle needs to be a black SUV and ultra-high-end, including leather or leather-like seats. Some examples of qualifying Lyft Lux Black XL vehicles are:

BMW X5
Cadillac Escalade
Lincoln Navigator

Becoming a Lyft XL Driver

Signing up as a Lyft XL driver is incredibly simple. If your vehicle meets the requirements, Lyft opts you into the program automatically. You do not have to take any additional steps if the qualifying vehicle is on the platform.

However, if you were driving for Lyft with a smaller car before, you will need to adjust your profile to qualify for Lyft XL. The company only allows one vehicle to be approved on an account, so you will need to add details about your larger one so you can make the switch.

To make the change, head over to your Driver Dashboard in the Vehicle section of the app. There, you can add details and upload documentation (inspection, insurance, and possibly registration information) for your bigger vehicle. Typically, it takes no more than 24 hours for the new vehicle to be approved by Lyft, suggesting what you submitted is complete and meets the company’s requirements.

If you want to be a Lyft Lux Black XL driver, you also have to maintain a driver rating of 4.7 or higher. New drivers have to build that rating through other programs before being eligible.

Do you drive or use Lyft Plus? Tell us about your experience in the comments below.

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Sláinte: Navigating Surge Pricing on St. Patrick’s Day Ridesharing

March 15, 2018 By Jackie Cohen 1 Comment

St. Patrick's Day ridesharing helps prevent drunk driving.

One of the most lucrative nights of the year for Lyft and Uber drivers — and one of the most expensive for riders — is coming up this weekend. And even a couple of localized St. Patrick’s Day ridesharing discounts barely make a dent in surge pricing during the holiday.

Both Lyft and Uber‘s surge pricing strategy kicks in whenever demand for rides outpaces supply. This system can make fares get a little bit pricier during rush hour but tends to make them skyrocket during large festivals and holidays.

In fact, surge pricing can result in up to double the fare you would otherwise pay during normal hours. That’s what makes so-called discounts on St. Patrick’s Day ridesharing turn out to not feel like a discount at all.

Local Discounts

That said, Lyft customers in the greater Phoenix area get 20% off of two rides during this weekend, thanks to a partnership with the Maricopa County Attorney’s Office that aims to minimize drunk driving incidents.

New customers in the area can download the app and receive $5 off their first four rides by using the promotion code BELUCKY. Lyft’s usual offer for new riders gives $5 off two rides with the use of the code NEWUSER10.

Meanwhile, $5 Uber discounts in the greater Memphis area are being financed by Hamilton Law Firm which is limiting availability to between 10:00 pm and midnight on March 17, not the entire weekend like the Phoenix discount.

Also distinct from the Phoenix discount: The law firm asks people to fill out a form on its website in order to receive the discount code.

Whether you live in one of the markets that has a discount available or not, there’s another way to save on the fare: choose the carpool versions of ridesharing — Lyft Line and UberPool.

Take a Taxi Instead

But even the pooled rides get more expensive as a result of surge pricing, so you might want to try taking a cab instead. Taxis usually don’t ratchet up their fare meters on holidays.

Although it might be challenging to find available cabs on the holiday known for heavy drinking — especially when it falls on a weekend like this year — once you get into a taxi, it can seem like a relief compared to the alternative.

Here’s one reason why a cab will be nicer than doing Lyft Line or UberPool: You probably won’t know your fellow passengers in a carpool situation, and on a night like St. Patrick’s, one of these strangers just might barf on you in the vehicle. In fact, a veteran driver for ridesharing services advises his colleagues to stock up on vomit bags before signing on that evening.

Other Surge Pricing Situations

Know that the surge pricing on holidays like St. Patrick’s Day last longer than during times like rush hour. When it’s not a holiday or major festival, a period of surge pricing can last an average of five minutes, according to research put out by Northeastern University.

In those situations, you can save money simply by waiting for the surge pricing period to end, although that option won’t work if you’re in a rush. It also won’t pan out on a holiday like St. Patrick’s Day, but you could always try it and see if anything changes.

Readers, what do you have planned for St. Patrick’s Day? What has your experience been with surge pricing on ridesharing service?

Read more about St. Patrick’s Day in our archives:

California DMV Reconsiders Commercial License Plates for Uber, Lyft and Sidecar

January 25, 2015 By Lilian Nwa 2 Comments

California DMV has reconsidered forcing Uber, Lyft and Sidecar drivers to get commercial license plates

Uber is an app-based taxi company founded in 2009, which operates in over 200 cities and 53 countries worldwide (and counting). Use of the company’s app allows people to send ride requests, which the company then forwards to its drivers. Currently, the company is valued at over $40 billion and is on track to post an annual revenue of $10 billion dollars at the end of this year, as reported by Business Insider.

Still, the company’s phenomenal rise has not been without controversy. A number of lawsuits have been filed against the company for crimes including a wrongful death claim against an Uber driver who ran over and killed a six-year-old. And just recently, a Delhi woman has sued the company after Uber driver Shiv Kumar Yadav allegedly raped her.

Criticism has also emerged concerning Uber’s user privacy policies. For example, in what is known as “God Mode,” Uber staff can track its customers’ movements. But instead of addressing some of these concerns, Emil Michael, senior vice president of Uber, added fuel to critics’ fire by suggesting that the company “dig into the personal lives and backgrounds” of those who report negatively about Uber.

This week, however, the company has won at least one important victory. On Friday, the California Department of Motor Vehicles decided to revoke an earlier memo (Vehicle Industry News alert VIN 2015-01) implying that drivers for Uber, as well as its less popular competitors Lyft and Sidecar, needed to carry commercial license plates.

As reported by the LA Times, the agency had earlier stated that passenger vehicles used “for hire, compensation or profit” were considered commercial vehicles and should be registered as such. Buzzfeed, which first reported on the memo, described the requirement as an “existential threat” for ride-service companies because “For drivers to switch their registrations to comply with California law, they would have to pay to make the conversion to commercial status, and shell out for higher annual registration fees.” Additionally, commercial insurance is almost 10 times more expensive than personal coverage, adding another significant expenditure.

But on Friday, Vehicle Industry News alert VIN 2015-01 was revoked. According to California DMV Director Jean Shiomoto, “There remains uncertainty about the interaction and effect of this law governing vehicle registration requirements with the more recent regulatory and statutory changes affecting ride share operators.” In his statement, Shiomoto continues that the matter requires further review before a definitive decision is reached. At least for now, these companies and their drivers are ‘safe.’

(Photo courtesy of of Raldo)