Lyft Expected to Gross Over $1 Billion
December 9, 2015 Leave a comment
Uber, the huge and somewhat notorious ride-hailing app, has some competition in Lyft, a company founded in San Francisco in 2012. Lyft has been building steam since then, with a net revenue of about $130 million in 2014, and a 40% market share in San Francisco and Austin, Texas.
In October of 2015 they made $83 million off of 7 million rides, and based on those numbers they’ve calculated an expected $1 billion run over the next year. A “run” in this case refers to calculations of gross bookings, so it’s not how much profit the company will actually make, but instead an estimate of how much total money they’ll pull down. It’s not a guaranteed income, of course, but runs are useful tools for companies and investors. If the math is sound, and if nothing catastrophic happens that throws the company for a loop, it should be feasible for them to bring in that money. Companies can take a run to investors to build confidence in their product, and investors can have some idea of how that company will perform.
Currently, Lyft operates in 150 cities around the United States, but hasn’t branched into the international market yet. They have more than 100,000 drivers, providing more than 1 million rides a week, and some very dedicated customers, hailing upwards of 100 rides a month. All that sounds pretty promising, and should appeal to investors.
The hard part for Lyft will be finding new investors, who they will need if they want to expand operations in the future, and likely will need in order to hit that $1 billion run. Recent drops in investing has made capital harder to come by of late, which could work against Lyft. However, according to the company, they’ve raised over $1 billion and have the bulk of that money saved away fro the future, so maybe they won’t need as much new blood for a while.