Lyft is a Silicon Valley change-the-world IPO moment. So was Facebook
While Lyft was preparing to go public this week in an IPO valuing the rideshare company above $20 billion, Facebook was preparing for something else: a lawsuit from the federal government over discriminatory housing ads.
"This is a lightning start for Lyft's stock as investors are salivating [over] owning a piece of the $1 trillion ride sharing market," Wedbush managing director Dan Ives said in a statement to CNBC. Its IPO filing stated that,"At Lyft, we work every day to address these challenges by improving transportation, with the goal of improving people's lives socially, economically and environmentally."
In April 2018, the company began making all Lyft rides carbon-neutral, but not by changes made to its core business model — it is one of the world's largest voluntary purchasers of carbon offsets. Nicole Moore, one of the driver-organizers behind a strike in Los Angeles this week, said that both Uber and Lyft need to do more to incentivize drivers to use electric vehicles."They are onboarding more and more drivers which causes more and more congestion, which causes more and more carbon." What is most needed is more financial support to buy emissions-free cars."Right now, their model is built on us buying and maintaining cars," Moore said.
The reason, according to UCLA Labor Center senior research analyst Lucero Herrera, is that the current business model for both Lyft and Uber only has two choices: Either they increase rates and can offer drivers more of a share and that in turn decreases demand, or they decrease the rate they pay drivers to offer cheaper rides and increase demand. The latter"is the only choice that has proven successful in terms of growing," and even that has not been profitable, Herrera said.
This is an issue with significant repercussions for society, according to Herrera, who was one of the authors of a UCLA study on the gig economy and drivers in LA. "I saw a grown man break down in tears telling me what the 25 percent cut meant to him," Moore added."Drivers are making far less than minimum wage after expenses."
"We are particularly concerned that the company is offering shares under a dual class voting structure, which means that public shareholders will have limited voting rights and less ability to successfully raise concerns with management and boards," Fugere said.
Driver-organizer Moore had a message for investors who believe their dollars include a conscience:"People who worry about ethical investments and have stock portfolios and don't want to invest in guns or tobacco, why would you want to invest in a poverty pimp?"
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