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Lyft IPO Success Shifts To Engaging DriversThis is a commentary on the Lyft IPO. By Michael Shustek The success with Lyft as the first big tech initial public offering of 2019 is due in part to impressive revenue growth in recent years and now their next challenge will be to retain drivers in the competitive ridesharing market. Lyft priced its $2 billion IPO at $72, the top of their price range and sold more IPO shares than expected ahead of the next offers by competitor Uber, along with tech companies Pinterest, Slack and Postmates. Of course, one of the most important valuations is the quality of its business and in the ridesharing industry, the service delivery by drivers is paramount. When you consider the factors of how Lyft earned such a lofty valuation - roughly $30 billion at the IPO price - look no further than the announcements about several changes the company made for drivers in an e-mail and posts on social media during the week before trading. To increase engagement with their driving team, the changes include steps to help tem earn more money and reduce environmental impacts. The Lyft Driver Services initiative includes a debit card with the ability to be paid instantly and without fees; Driver Centers where drivers may get car maintenance done at discounts of up to fifty percent (50%); launching a mobile service with repair trucks that arrive on location, and discount car insurance. Lyft executives have taken these steps to improve their driver's bottom line in addition to becoming more attractive while fending off their Uber competitor. Obviously, investors look eager to earn a piece of the ridesharing market. To satisfy their appetite, Lyft has been proactive with steps to ensure increased ridership, which depends upon having a strong workforce in place. By reducing driver-related costs, the company may be in a position to increasing revenues per ride. Although there are skeptics who believe U.S. equity markets are poised for below-average returns - and potential correction - in the coming decade, when a company takes steps like Lyft has to ensure maintaining competitive advantages, it speaks volumes about the state of the market. At the same time, many people believe that uncertainty remains with the future of the ridesharing space. Michael Shustek is an investor, author and thought leader. He is CEO of The Parking REIT and for more information, visit www.michaelshustek.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20190402006031/en/ |
