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Lyft Touts Revenue, Values in Pitch to Investors

Eric Newcomer
Lyft Touts Revenue, Values in Pitch to Investors

(Bloomberg) -- Lyft Inc. is deploying a video featuring fast-walking executives and drone shots of busy traffic in a private pitch to win over prospective public investors.

The 24-minute video punctuated by jump cuts and everything from funk beats to elevator music sets the tone for a roadshow that revs up this week. Lyft is seeking to raise as much as $2.1 billion in an initial public offering valuing the ride-hailing company at about $20 billion.

Lyft’s executives, in the video seen by Bloomberg, tout their San Francisco-based company as a founder-driven startup reshaping the transportation industry. Co-founder John Zimmer lays claim to a “strong brand based on our strong values.”

A not-so veiled jab at Uber Technologies Inc. comes early in the pitch. “We are solely focused on consumer transportation, not food, not trucking,” Zimmer says.

Chief Executive Officer Logan Green, also a co-founder, says in the video that Lyft has an opportunity “to deliver the largest shift to society since the invention of the car.” As of 2018, more than a quarter million Lyft riders have given up their cars because of the company’s service, according to one of the video’s narrators.

Comparing itself to companies like Spotify Technology SA that rent services rather than relying on their customers to buy products, Lyft says it’s riding the shift to “transportation as a service.”

Culture, Bikes

After 15 minutes about Lyft’s culture, bikes and autonomous vehicles, Chief Financial Officer Brian Roberts chimes in on the video: “And now the numbers.”

A toy owl head swivels in a cutaway scene and upbeat music kicks in as Roberts says the company’s focus on transportation has “enabled us to drive increasing revenue per active rider, significant growth at scale and strong operating leverage.”

Talking investors through the company’s favorite metrics, Roberts focuses first on active riders. From the first quarter of 2016 to the last quarter of 2018, the number of active riders increased 5.2 times to 18.6 million, he says.

During that period, revenue per active rider more than doubled. Together, those two “growth drivers” helped the company increase its revenue 11.9 times over, reaching $670 million in the fourth quarter.

Roberts then shifts to bookings, the total money generated by Lyft’s drivers before the company takes its cut. Bookings reached $8.1 billion in 2018 and the company’s share is increasing, helping to drive growth, he says.

Contribution Margin

“We believe it is a key indicator of the utility of the transportation solutions we provide, as well as just the scale and growth in our business,” he says.

Roberts then turns his attention to what the company calls its “contribution margin,” a measure of how Lyft rides are sending money to the company’s bottom line. It tracks how much money Lyft makes after variable costs but before expenses such as research and development.

The contribution margin doubled to 46 percent from the first quarter of 2016 to the last quarter of 2018. The contribution per ride meanwhile “nearly quadrupled.” However, Roberts warns that margin will fluctuate in the near-term because of bikes and scooters.

The company’s full loss -- $911 million in 2018-- isn’t mentioned at all. It simply appears on a spreadsheet in the final seconds of the video.

(Corrects story from March 18 that stated the wrong net loss figure for Lyft.)

To contact the reporter on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net

To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Michael Hytha, Anne VanderMey

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