Uber remains the biggest ride-hailing company in the world. During the third quarter of 2018, Uber’s revenue skyrocketed up to 38 percent from the previous year with a total of $2.95 billion. In terms of size, Uber’s scope reaches around 70 countries. The company is branching out into other business ventures like food delivery, freight hauling, air transportation, and autonomous driving. Uber also announced its plans to fund their artificial intelligence research for the future.
Many will view Uber as an unbeatable foe in the ride-hailing industry, but a worthy challenger in Lyft Inc. seeks to challenge the king for its throne. While the company stays mum on its financial records, Lyft plans to convince investors to buy their stocks on their opinion about the ride-hailing company’s growth in the US market share.
Lyft revealed that its share on the US market is rapidly reaching 40 percent, which is an increase from early 2018’s already impressive 35 percent. Lyft is currently serving about 600 Canadian and American cities, nearly triple the amount of its area in 2017. The significant increase in areas covered is the result of the company’s aggressive push to provide ride-hailing services to smaller cities.
Lyft feels the need to pitch its rapid growth on potential investors as it competes with Uber for the initial public offering (IPO), which is expected to arrive in the second quarter this year. Lyft received an estimated worth of $20 to $30 billion. Uber, meanwhile, dwarfs the value of Lyft with its $120 billion estimates. According to marketing strategy experts, Lyft will need to assure its investors that their company can produce a more attractive prospect over its biggest rival.
Uber’s 2017 scandals can help Lyft attract its investors to their side. Uber faced sexual harassment allegations, its chief executive officer Travis Kalanick’s forced resignation, and the use of illegal software to manipulate regulators. A social media protest went viral online because of Uber’s negative publicity, gave Lyft a shot at getting drivers and consumers without effort.
Lyft believes that investors will focus on the ride-hailing company’s growth and potential. As a result, Lyft prepares to present earning metrics that will convince investors to buy its stocks instead of Uber’s. The metrics include growth in car bookings, each passenger’s total rides, driver’s commission earnings, and percentage of carpooling service rides.
Jim Williams, Creative Planning Inc.’s Chief Investment Officer, believes that growth will be the investors’ focus on the IPO market. Creative Planning Inc. is a company that provides advisors for those who want to consider buying company stocks. Williams believes that investors want to know if Uber or Lyft are expanding.
Uber is Starting to Sweat
Uber executives believe that the company’s valuation in IPO will take a hit if investors will be judging the company in the way Lyft wants to pitch itself. Uber saw its global bookings growth fall to 6 percent, an unusual sight for a company that witnesses its growth expand to huge percentages consistently in the past.
Uber plans to focus less on metrics about its ride-hailing business and more on portraying itself as a global platform for mobility and logistics to IPO investors. Dara Khosrowshahi, Uber’s current CEO, plans to show investors that it is an established company capable of growing into other ventures like its food-delivery section, Uber Eats.
Flat World Partners founding partner and CEO Anna-Marie Wascher states that Uber and Lyft are two different ride-hailing companies that can offer exciting financial opportunities for IPO investors. The investment management company headed by Wascher invested in Lyft. Wascher believes that investors will take their chances on Uber for its plan for global expansion and it’s Uber Eats venture while investors will bet on the US ride-hailing market when they buy Lyft stocks.
