Ride-Hailing Business Too Tough for Lyft!
Lyft is still on track to lose no more than $600 million this year, excluding legal settlements. That is in line with the $50 million monthly cap on spending it promised investors back in April.
The second most valuable ride-hailing service in the country, may have attempted to sell itself to Apple, Google, Amazon, General Motors and even ride-sharing rivals Uber and Didi Chuxing, according to The New York Times.
“There is no shortage of conflicting rumors in our industry and we are not commenting on them,” Alexandra LaManna, a spokesperson for Lyft, said to USA TODAY.
Reports that Lyft is looking to be acquired have sprung up a few times this summer. The San Francisco, Calif.-based company hired Qatalyst Partners, a boutique investment bank that specializes in arranging mergers acquisitions, the Wall Street Journal previously reported.
Lyft isn’t in trouble yet due to a cash cushion of $1.4 billion – but it is not making a profit, reports the Times.
The company was valued at $5.5 billion as of January, which is dwarfed by Uber’s $60-billion-plus valuation. Didi Chuxing was worth $28 billion as of June.
Lyft’s desire to find a takeover partner suggests a struggle for the “gig-economy” service to become profitable. Paying its drivers can become costly. Much of Lyft’s revenue goes to drivers, and it often pays drivers more than it costs customers to use the app, according to leaked documents provided to Bloomberg.
-Article published on USAToday