Published on September 30th, 2017 | by James Ayre0
Lyft’s IPO Will Test Market Expectations Of Self-Driving Car Tech & Ride-Hailing Services
September 30th, 2017 by James Ayre
The popular on-demand taxi service Lyft is reportedly close to hiring an IPO advisory firm to set the foundation for a public offering, according to Reuters.
The news is interesting because as of yet there have been no major on-demand taxi services (also known as ride-hailing or “ride-sharing” services) to go public. While you can garner some sort of idea what one of these companies is “worth” by taking a look at the results of their latest private fundraising rounds, the view that an IPO will give will potentially be much more interesting.
A Lyft IPO would also mark one of the first times that market investors have been given a chance to appraise (in their way) the future potential of the idea of on-demand self-driving taxi services — which is what Lyft is ultimately aiming to become.
Reuters provides more: “Lyft was valued at $7.5 billion in its latest fundraising, while larger rival Uber is valued at $68 billion. Some question whether that is fair, given the range of scandals at Uber this year. … A ride services IPO tests the belief of many auto industry insiders that individual auto ownership will wane as people will sell their cars and rely on ‘mobility services’ such as ride services, car share, bike share — and self-driving vehicles.
“A Lyft IPO ‘is going to tell us what the valuations of these mobility services companies really are,’ said Mike Ramsey, research director at Gartner. … An IPO that values Lyft higher than its current $7.5 billion ‘is a step in a long journey toward self-driving’ vehicles, said Jeff Schuster, senior vice president of LMC Automotive.”
As a reminder here, it seems Lyft has in recent days been establishing working partnerships with every other major auto manufacturer out there. To date, the company has established collaborative efforts with GM/Chevy, Ford, and Jaguar Land Rover; as well as with Google/Waymo, nuTonomy, and Drive.ai.
Out of the on-demand taxi services out there right now, Lyft seems likely to be the one that stands the best chance of transitioning to a self-driving vehicle business model.