New documents have revealed that ride-sharing company Lyft is not doing so well. America’s second largest ride-sharing company has constantly been playing catchup to Uber, and it doesn’t look like it will reach Uber’s status anytime soon.
Lyft lost $127 million during the first half of 2015, as the company only received $46.7 million in revenue. The company is currently seeking $500 million from investors in order to cover the tens of millions of dollars that it goes through on a monthly basis. However, with these financial struggles, the company will likely have a difficult time attracting investors.
Lyft has a very sketchy financial background, and the company has constantly failed to meet expectations. This year, the company has experienced declines in revenue, added fewer customers than expected and lost massive amounts of capital.
Reports indicate that the company is blowing through cash in order to try to sustain a growth rate that can keep it from falling further behind Uber. Despite this, the company has simply failed to sustain the growth rate.
Like many young startup companies, Lyft has been overvalued because of the surrounding hype associated with the company. It has been valued on potential rather than actual performance. This is starting to catch up with Lyft, as many investment firms have downgraded their valuations of the company.
During the first half of this year, Lyft blew more than $96 million on marketing along. This is more than twice the company’s revenue during this same time period. The company might be attracting new drivers, but it is doing so at a loss.
A recent analysis of the company by a key investment firm read, “The company has a history of losses and is not projected to be profitable in the foreseeable future.”
This year, Lyft spent massive amounts of money buying billboards in New York’s Time Square and on Market Street in San Francisco. The company currently holds about a 40% market share in San Francisco.
Lyft has declined to comment on its financial performance.