In his last few weeks as a private company, Lyft reaches for every inch of the ride-sharing market it can get.
To do this, it takes on an old strategy: discounts. If you are a Lyft user, you may have noticed that the company has offered cheaper trips in recent weeks. Why? To encourage drivers to give up the Uber app for Lyft and hire additional rides from users who otherwise would have been reluctant to spend the money. After all, a $ 13 trip is a lot different from a $ 7 ride.
According to a report by The Information, Lyft's discounts increased to about a third of the driver's recent rides, helping Lyft collect another 4 percent of the American travel market. Lyft now holds 34 percent of the market, Uber claims the remaining 66 percent. The extra percentage points give Lyft a foot as he starts his roadshow. This is the final step before its Nasdaq IPO, expected in April.
We contacted Lyft to confirm the details in The Information's report. [1
Lyft recently had a value of $ 15 billion and will receive a valuation to the north of $ 20 billion with his highly anticipated debut. Uber's last private market valuation was around $ 72 billion. It is expected to outperform US $ 100 billion on the IPO.
This month's discount war is not the first time that the two companies affiliated with the hailing call have cut prices to attract drivers, despite the fact that investors have criticized and more on profitability put. However, this is the Silicon Valley, even if it was to go public before the IPO, in which companies should theoretically outperform profitability. Uber and Lyft seem to be doing well as they continue to burn cash by subsidizing rides.
Uber and Lyft filed in December a draft registration statement with the US Securities and Exchange Commission for their respective floats.
Lyft has selected JPMorgan Chase & Co. together with Credit Suisse Group and the Jefferies Group as leading IPO signatories. The company has so far raised $ 5.1 billion in venture capital funding.
Uber has reportedly appointed Morgan Stanley to conduct his IPO. A combination of debt and equity financing raised nearly $ 20 billion.