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Lyft files for IPO, says it 'represents freedom at your fingertips'

We combed through Lyft's SEC filing. Here's an FAQ with everything we learned.

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Lyft

Lyft is the first US ride-hailing company to be heading to the stock market.

Filing with the US Securities and Exchange Commission for its initial public offering on March 1, Lyft said it plans to "revolutionize transportation" and be the "defining brand of our generation."

When the company goes public, Lyft said it plans to set its share price between $62 and $68 per share. That means its estimated valuation could be somewhere between $21 and $23 billion, which is significantly higher than its current private valuation of $15 billion. Lyft will be listed on the Nasdaq using the ticker symbol LYFT and the IPO could arrive as soon as the end of March.

"We believe that our brand represents freedom at your fingertips: freedom from the stresses of car ownership and freedom to do and see more," Lyft wrote in the filing. "We believe that cities should be built for people, not cars."

The move puts Lyft ahead of its rival Uber in the race to Wall Street. Uber's CEO, Dara Khosrowshahi, has publicly said the company is focusing on going public in the second half of 2019, but it's looking like that timeline may be flexible. Uber submitted paperwork to the SEC for an IPO in early December. 

While Uber and Lyft offer the same service, hailing a ride with a smartphone app, it's expected each company will point potential investors to different aspects of its business. Uber will reportedly showcase itself as a global company with diverse features such as food delivery and flying cars. Lyft, much smaller, with services only in the US and Canada, is focusing on being a stable company that hasn't experienced the same kind of turmoil as Uber.

"Unsurprisingly, Lyft advocates that its key success factors include founder leadership, culture and values, and a singular focus on transportation," said Rohit Kulkarni, senior vice president of research for investment firm Forge. "Arguably, Lyft is taking a jab at Uber's miseries and general lack of exclusive focus on ride-sharing over the past couple of years."

Lyft's good guy personality is front and center in its SEC filing. We combed through the 220-page document for all the interesting tidbits. Here's the breakdown:

What is Lyft? First and foremost, Lyft is a ride-hailing service that created an app where passengers can push a button to hail a ride. But, according to Lyft's filing it's much more: "We are laser-focused on revolutionizing transportation." Lyft was incorporated in 2007 under the moniker Bounder Web, and then changed its name to Zimride in 2008. It officially morphed into Lyft as we know it in 2012. Since then it's launched several initiatives outside of the ride-hailing space, like carpool rides, bikes and scooters for rent, and self-driving cars.

The players. Lyft's co-founders are Logan Green and John Zimmer. In the SEC filing, they included a letter titled "Our life's work," which begins with them saying, "For us, this work is personal." The co-founders detail their younger years of being inspired to fix traffic and improve people's quality of life. "In those early days, we were told we were crazy to think people would ride in each other's personal vehicles," the co-founders wrote. "One billion rides later, we're able to look back on an industry that has been defined by the products Lyft pioneered."

The "defining brand of our generation"? Lyft said it aims to build the "defining brand of our generation." To do this it'll promote a company culture based on core values, like "authenticity, empathy and support for others," as well as a commitment to social responsibility. "We believe that our brand represents freedom at your fingertips," Lyft wrote.

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Lyft

Lyft goals. The company said it's going after the $1.2 trillion that US consumers spend on personal transportation every year. "On a per household basis, the average annual spend on transportation is over $9,500, with the substantial majority spent on car ownership and operation. Yet, the average car is utilized only 5 percent of the time and remains parked and unused the other 95 percent."

LYFT. Lyft will list on the Nasdaq using the ticker symbol LYFT. It's not clear yet how Lyft's pricing will work out, but it's been estimated that the company will be valued somewhere between $20 billion and $25 billion. Its latest valuation came in at $15 billion during its last funding round in 2018. Its IPO could come as soon as early April. 

The money. As far as financials go, the company said it garnered $2.2 billion in revenue in 2018 on $8.1 billion in bookings, showing year-over-year growth of 103 percent in sales and 76 percent in bookings.

Not so fast. What about money loss? Lyft lost $911.3 million in 2018, up from a net loss of $682.8 million in 2016 and $688.3 million in 2017. The company admits to having a "history of net losses and we may not be able to achieve or maintain profitability in the future."

The board. Lyft's board of directors has 10 members, three of whom are female. Sean Aggarwal has been the chairman since January. He's the CEO of Soar Capital, where he focuses on investments in early-stage technology companies. The most well-known board member is probably Valerie Jarrett, who was a senior adviser to President Barack Obama.

The stockholders. While Lyft's co-founders and board of directors will see a nice payday when the company goes public, so will a handful of major stockholders. Those include Rauten Europe, General Motors Holdings, entities affiliated with Fidelity, entities affiliated with Andreessen Horowitz and entities affiliated with Alphabet (Google's parent company).

Where you can catch a Lyft. Lyft is only in the US and a few cities in Canada, for now. That said, the company has a far reach across the US with its service reportedly in more than 300 markets, covering 95 percent of the population.

Riders. Lyft said it handled more than 1 billion rides in 2018. Broken down, it said it served 30.7 million riders in the US and Canada last year. "Almost half of our riders reported that they use their cars less because of Lyft, and 22 percent reported that owning a car has become less important" to them, the company said. It added that its active riders increased by 47 percent in the fourth quarter of 2018 compared to the same period in 2017.

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Lyft
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Lyft

Wait, ski racks? Passengers can request cars that accommodate wheelchairs and car seats in several cities where Lyft operates, but in a few "select" markets people can also ask for a car with a ski or snowboard rack.

Drivers. Lyft's service hinges on its contract drivers. It said more than 1.9 billion people drove for the company last year. Since it launched in 2012, Lyft said it's paid drivers a total of $10 billion in earnings.

Drivers get a piece of the pie. As a bonus for drivers in good standing, who've completed at least 10,000 rides as of the end of this month, Lyft said it'd pay drivers as much as $10,000. That money could be used to buy shares in the company at the IPO price, Lyft said. 

Lawsuits. Lyft is swimming in lawsuits. It lists 14 suits in its SEC filing and refers to several others. Six of the cases it details are class action suits brought by its drivers over classification. These drivers want to be classified as employees -- and get all the benefits that come with that -- instead of independent contractors. Lyft warns that if the current classification model is changed, "there may be adverse business, financial, tax, legal and other consequences."

The rivals. Unsurprisingly, Uber is listed as Lyft's main rival. But also included in the list are Juno and Via, which operate in far fewer cities, and taxi companies. Lyft also cites Uber, Lime and Bird as competitors in the scooter world.

Let's talk self-driving cars. Lyft is building its own autonomous vehicle system at an engineering center it calls Level 5. In the filing, the company said its goal is to ensure "access to affordable and reliable autonomous technology." Since January 2018, Lyft said it's given 35,000 rides in autonomous vehicles accompanied by a safety driver.

Lyft is dependent on… Amazon? Lyft uses Amazon Web Services, a cloud services provider, to run its app. That means if Amazon ever falls prey to a glitch, bug or hacker, Lyft's services could also be interrupted or go silent.

So much data. Lyft has conducted more than 1 billion rides and it's collected data from those rides along the way. So what's it doing with that data? Using it to "inform our machine learning algorithms and data science engines."

Partnerships. To spread its reach into cities, Lyft said it created relationships with more than 10,000 organizations, cities and municipalities to facilitate rides for their employees, customers and constituents. It also created exclusive marketing partnerships with brands like Delta Air Lines.

Earthquakes, floods and tornadoes? Lyft is covering all its bases when it comes to risks. It lists natural disasters as a factor that could disrupt its operations. Lyft's headquarters are particularly vulnerable, the company wrote, because they're in San Francisco -- an area known for seismic activity.

Then, there's death. The word "death" is used 26 times in Lyft's SEC filing. The company warns that lawsuits may arise from people dying while riding in its cars, or on its bicycles and scooters. Lyft's word to investors? This "could lead to negative publicity, harm to our reputation and brand, significant legal, regulatory or financial exposure or decreased use of our bikes and scooters."

This story originally published on March 1 and is being updated continually as more information becomes available.