Lyft: Closing the Gap on Uber
December 20, 2017

Lyft: Closing the Gap on Uber

Executive Summary

Logan Green and John Zimmer founded Lyft, a ridesharing platform, in June 2012. It was first launched as a service of Zimride, a long-distance ridesharing company they had previously founded in 2007. Lyft was fundamentally designed as the first peer-to-peer ridesharing service, unlike Uber’s original value proposition as a mobile app to request premium black cars in a few metropolitan areas. As a brand, Lyft became known for the large pink furry mustaches drivers attached to the front of their cars. Unlike Uber’s professional look-and-feel due to its roots in black car services, Lyft riders were given an opportunity to have a personal connection with the drivers. Lyft riders were encouraged to sit in the front seat and fist bump with drivers upon meeting.

In terms of valuation and fundraising, the company was valued at approximately $11.5 billion as of December 2017 and has raised a total of $4.1 billion in funding. Key investors include Andreessen Horowitz, Founders Fund, Mayfield, General Motors, and Capital G, Alphabet’s private equity investment arm.

In terms of scale, Lyft currently operates in an estimated 300+ U.S. cities, including New York, San Francisco and Los Angeles, and provides an estimated 30 million rides a month. Lyft will be expanding into Canada in December 2017 to compete with Uber.

We feel optimistic about Lyft’s execution and track record to date, given its rising market share in the U.S. Our investment thesis for Lyft is driven by the growing adoption of ridesharing apps among consumers, Lyft’s exclusive focus on U.S. to date, and second-mover advantage helping Lyft’s pathway to profitability. Lyft, however, faces significant competition from larger ridesharing companies and remains undeveloped overseas. The key issue for investors to monitor over the next eighteen to twenty-four months is the effect of competition on Lyft’s market share and any evidence of greater losses as Lyft ramps up its international presence.

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PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.