Lyft’s debut is the first of several high-profile IPOs expected to emerge this year from the technology industry, a sector that has helped propel the stock market in recent years. “This is a pat on the back for ride hailing as a category,” said Rohit Kulkarni, senior vice president of research at Forge. Now that both Lyft and Uber have made it easy to summon a ride on a mobile app, more people are already starting to wonder if owning their own cars will make sense in the future. The IPO represents a watershed moment for ride hailing, an industry hatched from the rise of smartphones.
#Hail for lyft drivers
“They could increase revenue by charging more, but that won’t be a good thing for passengers, or they could cut the fares for drivers, but that will cause drivers to quit and degrade the service.” Cradeur, who also drives for Uber, plans to sell his Lyft shares if and when the stock hits $100. “I just can’t see how they will do it,” said Jay Cradeur, who has been driving for Lyft since 2015. Not even one of Lyft’s own drivers who exercised an option to use a $1,000 bonus awarded as part of its IPO to buy stock is convinced the San Francisco company will ever make money.
Both Uber and Lyft are relying on the eventual deployment of autonomous vehicles to help them reduce the cost of paying drivers, although deployment on a large scale could be many years away.
Still, Lyft’s path to profitability is uncertain, and it’s under pressure to keep prices low as it competes for customers with Uber and traditional taxi companies.
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