Prospectus Summary
PROSPECTUS SUMMARY This summary highlights selected information that is presented in greater detail elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, the terms “Lyft,” “the company,” “we,” “us” and “our” in this prospectus refer to Lyft, Inc. and its consolidated subsidiaries.LYFT, INC.
Our Mission
Improve people’s lives with the world’s best transportation.
Overview
Lyft started a movement to revolutionize transportation. In 2012, we launched our peer-to-peer marketplace for on-demand ridesharing and have continued to pioneer innovations aligned with our mission. Today, Lyft is one of the largest and fastest-growing multimodal transportation networks in the United States and Canada. To date, we have facilitated over one billion rides.
We believe that cities should be built for people, not cars. Mass car ownership in the twentieth century brought unprecedented freedom to individuals and spurred significant economic growth. However, in the process, city infrastructure became overwhelmingly devoted to cars. Roads and parking lots have replaced too much green space. Mass car ownership strains our cities and reduces the very freedom that cars once provided.
Car ownership has also economically burdened consumers. U.S. households spend more on transportation than on any expenditure other than housing.1 In the United States alone, consumers spend over $1.2 trillion annually on personal transportation.2 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.3 Yet, the average car is utilized only five percent of the time and remains parked and unused the other 95%.4 Consumers are seeking better ways to get around. They have grown accustomed to the convenience and immediacy of the on-demand economy and expect their experiences to be more simple and enjoyable. Existing transportation options have failed to meet this shift in consumer demand, creating the opportunity for a better solution.
We believe that the world is at the beginning of a shift away from car ownership to Transportation-as-a-Service, or TaaS. Lyft is at the forefront of this massive societal change. Our ridesharing marketplace connects drivers with riders and we estimate it is available to over 95% of the U.S. population, as well as in select cities in Canada. In 2018, almost half of our riders reported that they use their cars less because of Lyft, and 22% reported that owning a car has become less important.5 As this evolution continues, we believe there is a massive opportunity for us to improve the lives of our riders by connecting them to more affordable and convenient transportation options.
We are laser-focused on revolutionizing transportation and continue to lead the market in innovation. We have established a scaled network of drivers and riders, or users, brought together by our robust technology platform that powers millions of rides and connections every day. We leverage our technology platform, the scale and density of our user network and insights from over one billion rides to continuously improve our ridesharing marketplace efficiency and develop new offerings. For example, we pioneered a shared ride offering, or Shared Rides, providing lower-cost rides to riders traveling similar routes while improving the efficiency of our network. More recently, we were the first to launch a publicly-available commercial autonomous offering in the United States.
Today, our offerings include an expanded set of transportation modes, such as access to a network of shared bikes and scooters for shorter rides and first-mile and last-mile legs of multimodal trips. We also recently added information about nearby public transit routes in select cities to offer riders a robust view of transportation options. Our multimodal platform enables TaaS, which we believe offers a viable alternative to car ownership. We anticipate the demand for our offerings will continue to grow as more and more people discover the convenience, experience and affordability of using Lyft.
To advance our mission, we aim to build the defining brand of our generation and to promote a company culture based on our unique values and commitment to social responsibility. We believe that our brand represents freedom at your fingertips: freedom from the stresses of car ownership and freedom to do and see more. In addition, our core values focus on authenticity, empathy and support for others and encourage our team members to take initiative. These values have given rise to a unique company culture that fosters an amazing community of drivers, riders and employees, and has helped establish Lyft as a widely-trusted and recognized brand. We believe many users are loyal to Lyft because of our values, brand and commitment to social responsibility.
Our values, brand, innovation and focused execution have driven significant growth in market share and in the number of users on our platform. As ridesharing becomes more mainstream, we believe that users are increasingly choosing a ridesharing platform based on brand affinity and value alignment. Our U.S. ridesharing market share was 39% in December 2018, up from 22% in December 2016.6 This growth comes from both new drivers and riders as well as increased ride frequency. For the quarter ended December 31, 2018, we had 18.6 million Active Riders and over 1.1 million drivers who provided rides. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Business Model” for a definition of Active Riders, one of our key business metrics.
Our revenue was $343.3 million, $1.1 billion and $2.2 billion in 2016, 2017 and 2018, respectively, representing year-over-year growth of 209% from 2016 to 2017 and 103% from 2017 to 2018. We generated Bookings of $1.9 billion, $4.6 billion and $8.1 billion in 2016, 2017 and 2018, respectively, representing year-over-year growth of 141% from 2016 to 2017 and 76% from 2017 to 2018. Our net loss was $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively, and our Contribution was $82.0 million, $400.9 million and $920.8 million in 2016, 2017 and 2018, respectively. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Key Business and Non-GAAP Metrics and Trends” for a description of Bookings and Contribution, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Financial Measures” for a reconciliation of Contribution to revenue, the most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting principles, or GAAP.
Why Lyft Wins
Visionary, Founder-Led Company. Our Co-Founders have always led our company with a focused and consistent mission to improve people’s lives with the world’s best transportation. We seek to improve people’s lives socially, economically and environmentally. We believe the best transportation is the safest, most reliable, lowest cost to deliver and most caring about the communities served. Our management team’s long-term focus and commitment underpin everything we do at Lyft. We believe that focusing on purpose and people provides a lasting competitive advantage.
Culture and Values. Our core values are Be Yourself, Uplift Others and Make it Happen. Our team members, who uphold our values and live our mission every day, are at the forefront of cultivating and spreading this culture across the drivers, riders and communities we serve. This continuous interaction across the entire Lyft community creates a virtuous cycle which further reinforces our culture and fuels our growth.
Authentic Brand. We believe the authenticity of our culture and values positions us to build the defining brand of our generation. Our brand embodies a commitment to exceptional offerings and social responsibility. We have built a brand that balances our mission-driven ethos with a friendly, hospitality-oriented personality. The strength of our brand is a key driver of our ability to attract and retain users and serves as a strategic differentiator. We believe that affinity for our brand will continue to strengthen as consumers increasingly gravitate towards brands that are purpose-driven and emphasize corporate social responsibility.
Singular Focus on Transportation. Transportation is not simply a massive market opportunity, but also an extremely complex problem demanding complete commitment and thoughtful execution. We are singularly focused on revolutionizing transportation. This enables us to continually address the needs of a diverse and evolving user base through innovative offerings, scale our user network and grow our market share. We believe that this focused approach is critical to truly leading and winning the TaaS market.
Driver-Centric. We focus on providing drivers with a best-in-class experience. From day one, we offered in-app tipping to help drivers maximize earnings. Drivers have access to 24/7 support and earnings tools as well as career coaches, education resources and flexible car rental programs. We are also making significant investments in Driver Hubs, our driver-centric service centers and community spaces, to assist drivers on and off the road. We also introduced subscription offerings to encourage greater ride frequency, thereby providing more earning opportunities for drivers.
Innovative Multimodal Platform. Our multimodal platform offers riders seamless, personalized and on-demand access to a variety of transportation options. We empower riders to select the mode of transportation best suited to their specific needs at the exact moment they need to get somewhere. Our platform enables riders to optimize their journey across a number of factors including time, cost, number of seats, service, comfort and convenience. True to our pioneering ethos, we are constantly innovating on our platform and unlocking access to new modes of transportation.
Personalized, Data-Driven Insights. We have collected data from over one billion rides and over ten billion miles driven to inform our machine learning algorithms and data science engines. We leverage insights from this data to improve the product experience for riders by presenting them with personalized transportation options. Our data insights also allow us to anticipate market-specific demand, enabling us to create customized incentives for drivers in local markets. We enable riders to optimize routes across multiple modes of transportation which we believe provides us with a significant advantage over single modality providers.
Unique, Established Partner Relationships. We have established relationships with over 10,000 organizations, cities and municipalities to facilitate rides for their employees, customers and constituents. We also have exclusive marketing partnerships with leading brands, such as Delta Air Lines, to extend our reach.
Pioneering Autonomous Vehicle Strategy. We are investing in autonomous technology and employ a two-pronged strategy to bring autonomous vehicles to market. Our Open Platform provides market-leading developers of autonomous vehicle technology access to our network to enable their vehicles to fulfill rides on our platform. Simultaneously, we are building our own world-class autonomous vehicle system at our Level 5 Engineering Center, with the goal of ensuring access to affordable and reliable autonomous technology. We believe that the strength of our brand, our trusted relationships with riders and our expertise in operating a ridesharing network at scale, as well as our two-pronged strategy to bring autonomous vehicles to market, will be competitive advantages that will enable us to capture value in the emerging autonomous vehicle ecosystem.
Improving Transportation Improves People’s Lives
The mass production of cars in the twentieth century unleashed an enormous wave of productivity and economic expansion. The automobile grew to become a significant part of the American dream—“a car in every garage”—as well as a symbol of freedom.
As the population expanded, the number of vehicles on the road increased. Eventually, traffic and congestion overtook the efficiency and convenience that cars initially provided. In 2017, the average American spent 41 hours per year in traffic during peak hours.7 Every day, hundreds of millions of Americans experience negative consequences associated with personal car ownership:
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.
Transportation is a Massive Market Opportunity
Transportation is a massive market. In 2017, transportation was the second largest household expenditure after housing and was almost twice as large as healthcare and three times as large as entertainment.12 Our market opportunity today includes transportation spend in the United States and Canada. In the United States alone, consumer expenditures on transportation were approximately $1.2 trillion in 2017.13 We believe that Lyft currently addresses a substantial majority of this massive market, and we intend to further extend our offerings to capture more of this opportunity in the future. We also believe that we have a significant incremental opportunity to address transportation spend by businesses and organizations.
We believe we are still in the very early phases of capturing this massive opportunity. In 2016, ridesharing accounted for just one percent of the vehicle miles traveled in the United States.14 We are one of only two companies that have established a TaaS network at scale across the United States. This scale positions us to be a leader in the continued transportation revolution. Across industries, companies that have established trusted user relationships at scale are able to drive change and create substantial value in the process. We believe this is especially true in transportation. We are focused on continuing to build our platform with the characteristics that are critical to winning and maintaining strong user relationships at scale, including size, marketplace density, brand affinity, trust, affordability, reliability and expertise in building and scaling networks.
Powerful Trends are Enabling Change
Growth of Sharing Versus Ownership. Consumers increasingly value accessibility and experiences over ownership. Across industries, Internet-enabled businesses have delivered value by connecting underutilized supply with consumer demand, driving changing consumer preferences regarding ownership of material goods. In a 2016 survey, 57% of U.S. respondents who used sharing services said that well-priced and convenient offerings could cause them to give up ownership altogether.15 Rise of On-Demand Services. Consumers expect the freedom to access products and services at their convenience. For younger generations born as digital natives, on-demand services are the new normal. This opens up economic opportunities for businesses to serve consumers through mobile apps, a trend we expect to continue with increasing momentum.
Greater Affinity Towards Mission-Driven Brands. Consumers, especially millennials, are gravitating towards brands that value community engagement and embrace social and environmental responsibility. 88% of millennials expect companies to produce and communicate the results of corporate social responsibility efforts, and 89% of consumers are likely to switch brands to one that is associated with a good cause, given similar price and quality.16 Increasing Demand for Flexible Work Opportunities. Technology has enabled online platforms that provide workers with independent and flexible opportunities to generate income on a per-job basis, allowing them to earn money on their own schedules. 95% of net job growth from 2005 to 2015 was in the alternative work category, which includes independent contractors and freelancers.17 We believe that this trend will continue.
Emergence of New Modes of Transportation. New modes of shared transportation are being deployed and are improving the consumer experience by enabling riders to optimize across preferences including cost, comfort and time. For example, networks of shared bikes and scooters provide affordable options, potentially more efficient first-mile and last-mile rides and access for communities that have been historically underserved. We believe that in the future, fleets of autonomous vehicles will unlock a new mode of transportation that will complement existing modes on scaled TaaS networks.
The Lyft Solution
Our Multimodal Platform
Our multimodal platform offers riders seamless, personalized and on-demand access to a variety of transportation options and is comprised of:
Our User Network
We have established one of the largest transportation networks in the United States and Canada with 18.6 million Active Riders and over 1.1 million drivers who provided rides for the quarter ended December 31, 2018. We currently operate in over 300 markets across the United States and Canada, each with its own unique user network. Our dynamic platform adjusts to the specific attributes of each market on a real-time basis. Our network continues to grow with Active Riders increasing 47% in the fourth quarter of 2018 compared to the same period in 2017.
Drivers
The drivers on our platform are active members of their communities. They are parents, students, business owners, retirees and everything in between. The majority drive in their free time to supplement their income.18
Riders
Our riders are as diverse and dynamic as the communities we serve. They represent all adult age groups and backgrounds and use Lyft to commute to and from work, explore their cities, spend more time at local businesses and stay out longer knowing they can get a reliable ride home.19
Benefits to Key Stakeholders
Key Benefits to Drivers
We work hard to serve the community of drivers on our platform, empowering them to be their own bosses and providing them the opportunity to focus their time on what matters most. Key benefits to drivers on our platform include:
Key Benefits to Riders
We work hard to provide our riders with a quality experience every time they open the Lyft app, in order to earn the right to have Lyft be their TaaS network of choice. Key benefits to our riders include:
can enter their destinations quickly. The more rides that are taken on our platform, the better we are able to offer our riders personalized experiences most suitable to the trip being planned.
Key Benefits to Our Communities
Building community and having a positive local impact is fundamental to who we are. We approach working with our partners, cities and municipalities in a collaborative manner and seek to establish mutually beneficial relationships based on trust, respect and a common objective of improving people’s lives by improving transportation.20
We work to have a positive impact in our communities in the following ways:
affordable transportation. Lyft is also committed to reducing instances of driving under the influence, or DUIs, by providing a reliable alternative for riders.
Our Growth Strategy
U.S. consumers spend over $1.2 trillion on transportation annually.22 We are in the very early phases of capturing this large opportunity. Our key growth strategies include our plans to:
our platform has typically increased over time. For example, riders who took their first ride on our platform in 2015, or our 2015 cohort, took an aggregate of 25.1 million rides during 2015. In 2018, this 2015 cohort took an aggregate of 66.9 million rides, representing 266% of the rides taken by the cohort in 2015.
Risk Factors Summary
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include the following:
Channels for Disclosure of Information
Investors, the media and others should note that, following the completion of this offering, we intend to announce material information to the public through filings with the Securities and Exchange Commission, or the SEC, the investor relations page on our website, press releases, public conference calls and webcasts.
The information disclosed by the foregoing channels could be deemed to be material information. As such, we encourage investors, the media and others to follow the channels listed above and to review the information disclosed through such channels.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
Corporate Information
We were incorporated in 2007 as Bounder Web, Inc., a Delaware corporation. In 2008, we changed our name to Zimride, Inc. We founded Lyft in 2012 and changed our name to Lyft, Inc. in 2013 when we sold the assets related to our Zimride operations. Our principal executive offices are located at 185 Berry Street, Suite 5000, San Francisco, California 94107, and our telephone number is (844) 250-2773. Our website address is www.lyft.com. Information contained on, or that can be accessed through, our website does not constitute part of this prospectus and inclusions of our website address in this prospectus are inactive textual references only. You should not consider information contained on our website to be part of this prospectus or in deciding whether to purchase shares of our Class A common stock.