What's going on?

Late last week, ridesharing company Lyft shared something else: previously unseen financial details ahead of its initial public offering (IPO) this year.

What does this mean?

Lyft made $2.2 billion in revenue last year � double the $1.1 billion it took in 2017. But the company also lost $911 million in 2018 compared to $688 million in 2017 (tweet this). Lyft is still increasing its number of users � but at a slower pace than in previous years.


Eventually, Lyft’s existing (and future) investors will want a reward for the risk they’re taking with their cash. Whether that�s through dividends or simply selling the stock for more than what they paid, Lyft turning profitable would help. But the company itself is warning it may never actually make any money…

Why should I care?

For markets: Not all shares are created equal.

Post IPO, Lyft will have �dual-class stock�: two different classes of shares, one of which has much greater voting power. Its founders thereby retain greater operational control and limit the influence of other shareholders � including any pesky would-be activist investors. Several publicly traded tech giants like Alphabet and Facebook have similar dual-class stock structures. Snapchat owner Snap also issued dual-class shares when it �went public� � but their value has since fallen precipitously. With Snap�s founders controlling 96% of its voting power, giving investors more say could�ve led to a different outcome.

The bigger picture: Lyft is blazing a trail.

Lyft, which only operates in North America, said that it represents 39% of the US rideshare market. But it�s dwarfed by global rival Uber, which made $11.3 billion in revenue � and $1.8 billion in losses � last year. Uber, which also dabbles in food delivery and freight shipping, is planning an IPO of its own in 2019. How Lyft fares (pun intended) will demonstrate investors� appetite for loss-making companies and likely affect Uber�s valuation. Such companies were all the rage last year, but that was then…