Ride-hailing giants face bumpy road to profitability
NEW YORK (AP) — Ride-hailing giants Uber and Lyft have redefined what we expect from transportation. But it’s unclear whether the companies can turn their popularity into profits.
Lyft will give investors their first in on the ride-hailing phenomenon when the company’s stock begins trading on the Nasdaq Friday.
But while both companies are growing fast, they are losing money just as quickly and face significant challenges to profitability. Last quarter, Uber lost $865 million while Lyft lost $249 million.
Both are hinging future profitability on the development of autonomous vehicles, which lower driver expenses but could take many years to reach mass adoption.
Other unprofitable companies have pulled off high-profile IPOs despite questions around their money-making ability and a few more are expected to go public this year, including Uber.