Is the second-placed lift-sharing firm about to run flat?
Lyft are like Burger King. They are a massive operation (recently valued at $5.5bn) but also very clearly in the shadow of Uber, the world’s most valuable start-up. The Verge reports on this story, offering up a tale of potential woe. Essentially, the tale goes like this: Uber recently sold off their Chinese interests and cemented their position at the top of the tree. If ride-sharing plays out as they hope it will do, they will continue to be the Big Dog and will come to gradually take over the yard (it’s a mixed metaphor, you see. Clever stuff).
And herein lies the problem for Lyft. If Uber gradually move to world domination, will the company valued at $5.5bn today be worth that tomorrow? If they get squeezed out, their value falls and falls until they are practically valueless. That is not a scenario that will manifest anytime soon for a company that has $1.4bn in cash right now, as Lyft does, so perhaps Uber’s somewhat blasé approach is as much bluster as it is a serious intent to dig in for long siege against their closest rivals.
Further evidence for the defence comes in the fact that Lyft are reported to have rebuffed previous overtures from General Motors – who have put more than $500m into the ride-sharing platform – so they are not exactly setting up a firesale here.
All of which means that Lyft’s overtures to various businesses (Apple, Google and Uber have all been approached, we are told) are hard to read. It’s the sort of thing that can make investors jumpy, yet at the same time Lyft is cash-rich, very successful and surely entitled to make enquiries around town to try and shore up their future?
