Don't Read This If You're Bullish About Lyft
What does it say about Lyft’s financial viability that each car ride is worth the same as a scooter or bike trip? You decide.
Kicking the tires on Lyft’s IPO filing reveals two troublesome details.
Photographer: Patrick T. Fallon/Bloomberg
The coming initial public offerings from Lyft Inc. and Uber give the public its first deep look inside the economics of car rides on demand. There were two obscure data points about Lyft that I found discouraging about the financial viability of that company, and potentially the entire industry.
First, Lyft disclosed in its IPO document that it generates about the same average revenue for each car ride as it does from a trip on Lyft's growing network of rented bicycles and scooters: $3.75, to be exact, as of the fourth quarter.2And second, Lyft's financials show that its average expense for each ride has gone up.