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On-Demand Startups Are Hemorrhaging Tens of Billions a Year

We tallied the losses investors don’t seem to care about. 

Ride Hailing App Lyft Has IPO On Nasdaq Exchange
Photographer: Mario Tama/Getty Images North America

The ride-hailing upstart Lyft Inc. was the first of a new crop of money-losing startups to go public on Friday, raising $2.34 billion in a market debut that saw shares pop from $72 to $78 at market’s close. That values the San Francisco-based company at $22.4 billion, despite the fact that it posted a net loss of $911 million on $2.2 billion in revenue in 2018.

But if you think Lyft’s shortfall is bad, then I urge you to read our story from last week on China’s Meituan, the World’s Greatest Delivery Empire. Led by the deceptively relentless Wang Xing, whose acrimonious battle with Alibaba Group Holding Ltd. makes the Lyft-Uber rivalry look like a game of Words With Friends, the Beijing company delivers meals to people’s doorsteps in 2,800 Chinese cities and has plunged into adjacent business like bike sharing and event ticketing. In 2018, Meituan lost 115.4 billion yuan, or a kind-of-unbelievable $17.2 billion, according to regulatory filings.