Lyft will best its longtime rival Uber by becoming the first ride-hailing app to go public, The Verge reports.
The race to go public between the two ride-hailing giants started started months ago. Last December—on the very same day—both companies filed the preliminary paperwork for an initial public offering (IPO), signifying it was just a matter of time before one of the companies made the announcement. Today, the official S-1 document has been filed with the Securities and Exchange Commission.
As the fast-growing underdog, Lyft currently has 38 percent of the U.S. market share, which equals about 18.6 million “active riders,” according to company data. The company also only currently operates in the U.S. and Canada, in about 350 cities, compared to Uber’s global foothold.
Lyft now faces some potential advantages—and some serious challenges.
The choice to go public comes at a time when Lyft is building on its decade of providing ride-hailing in private cars by investing in new modes of transport. Lyft has sought to help its users reduce car use from the beginning, as the company was founded around the idea that on-demand rides might wean users off car ownership. But only recently has it provided tools that help users choose other modes, like in-app public transit directions.
Last summer, after a pilot program in Chicago, the company expanded its “Ditch Your Car Challenge” to 35 cities, where users could sign up for $550 in Lyft credit to test using its ride-hailing and bike-sharing services exclusively. The idea is that users can eventually pay a monthly subscription fee for unlimited rides on any Lyft product.
Lyft’s IPO is also big news for bike share. Last year, Lyft bought Motivate, the country’s largest bike-share operator. Lyft now manages the biggest bike-sharing fleet in the country, including some of the most successful markets like New York’s Citi Bike. And Lyft has its own scooter share as well, which is on the ground in a handful of cities like Denver and Los Angeles.
Of course, Uber is also in direct competition with Lyft there, too, with fleets of Uber’s Jump electric bikes and scooters in 16 cities across the U.S. Uber announced this year it would begin offering public transit directions in its app as well, starting with a pilot program in Denver.
What does this mean for Lyft’s customers? Potentially higher ride-hailing rates. Over the last few years, and particularly over the last few months, Lyft has been undercutting prices and introducing new features in an effort to stimulate growth. Lyft made $2.2 billion in revenue in 2018 but lost $911.3 million the same year.
Now the company is charged with becoming profitable, which may include having to pay drivers more. But at the same time, Lyft is providing more affordable options, like shared rides, bikes and scooters, where lower prices may end up shifting riders towards more sustainable modes. That would also help Lyft fulfill some major environmental commitments, like an announcement last September that it would offset all Lyft rides and operations, making the company carbon neutral.
Lyft has also made a concerted effort to partner with cities. In the past year, while Uber faced widespread concerns about the company’s safety record after a fatal crash in its self-driving unit, Lyft mounted a comprehensive campaign to work more closely with city leaders. This has meant offering more data to local governments and partnering with transit agencies to subsidize rides that start or end at transit stations, including a partnership with Alphabet’s self-driving initiative Waymo. There are some cities that offer discounted Lyft rides in place of bus lines that reduced or eliminated service.
With Lyft now fully integrated into the daily transportation services provided by dozens of U.S. cities, its commitment to transit and bike share will be under scrutiny as it transitions from a startup into a public company. Lyft’s existing good relationships with those cities could mean a smoother ride for transportation leaders navigating the brave new world of public-private partnerships.