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Data Sheet—Lyft Has Proven It Can Grow, But Not Necessarily Make Money

March 4, 2019, 1:52 PM UTC

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The financial world must periodically stand agape at the wonder of “technology” companies as they first reveal their results to the public. Lyft, for example, caused much hoopla by being the first of the expected mega-unicorns to file its IPO papers, as if a first-mover advantage matters in this regard.

So Lyft is speedy. But like its archrival Uber—which has disclosed performance data publicly ahead of its IPO filing—Lyft’s results are atrocious by any objective standards. Yes, it has proven it can grow. It racked up $2.2 billion in revenue last year, about double the year before. But Lyft lost nearly a billion dollars from operations in 2018. Its cash balance declined by $600 million. And while the number of rides it provides continues to tick up, its average revenue per ride is tiny: $3.56 in 2018.

Lyft makes a virtue of its focus. It only provides transportation, primarily through rides in cars but also through bikes and scooters. Revenue from the latter category wasn’t material last year, however. Lyft’s simpler business model will get chewed over by investors as they compare it to Uber’s. The rap on Uber is that the growth in its core business is anemic, while its hoped-for bright spots are its prepared-food delivery and freight forwarding businesses. Lyft has neither of these product lines.

The fine print in Lyft’s offering reveal one tantalizing clue as to just how far away profitability is for Lyft—and likely Uber too. Lyft has more than $3 billion worth of state and federal net operating loss carryforwards (NOLs), an arcane tax-accounting gimmick that gives companies that lose money the opportunity to deduct these losses from income earned in future years. (This trick is available to other investors as well. See here how the current leader of the free world avoided paying taxes in years past.) Lyft says, however, that even though its NOLs don’t begin to expire until 2030 (federal) and 2021 (state), “it is possible that we will not generate taxable income in time to use NOLs before that expiration, or at all.”

In case any of this was a little confusing, let me break it down for you: Lyft is telling prospective investors it might not make money for 11 more years.

Adam Lashinsky


Expanding repertoire. Elon Musk announced via Twitter on Sunday that Tesla would unveil its long-awaited crossover SUV Model Y on March 14. The new vehicle is expected to be about 10% bigger than the Model 3, with a slightly lower price and less battery range. At Musk's other company, SpaceX, an unmanned test of the company's capsule to carry humans succeeded in reaching the International Space Station on Sunday. A takeoff currently scheduled for July will use the Crew Dragon to carry astronauts Bob Behnken and Doug Hurley to the space station.

See you in court. Chinese telecom giant Huawei is getting ready to sue the U.S. government over rules that ban federal agencies from buying its gear. The lawsuit is expected to be filed later this week in a federal court in East Texas, the New York Times reports.

Tell me something boy. Communications gear maker Juniper Networks is acquiring Mist Systems for $405 million. Mist makes A.I.-controlled WiFi systems that include its digital assistant Marvis to help users set up their networks.

Second bite at the apple. Amazon is reportedly looking into launching a new grocery store chain that would be distinct from its Whole Foods unit. The stores are expected to be opened in major cities in the United States, with the first launching in Los Angeles before the end of the year.

Quick response. A controversial Android app produced by the Saudi Arabian government will stay in Google's Play store. Google told U.S. lawmakers who objected to the Absher app, which lets men track women and control where they travel, that the program did not violate its terms of service. Apple said it is still reviewing the iOS version of the app.

Sad news. Tristan O’Tierney, co-founder of Square, died last month at age 35, his mother, Pamela Tierney, said on Saturday. O’Tierney, who struggled with addiction, helped write Square's original mobile app and left the company in 2013.


Plans to save the world from the impact of climate change may require more than just curbing emissions of greenhouse gases. Particle physicist Klaus Lackner has spent more than 20 years trying to perfect a machine that can pull already emitted carbon dioxide out of the air and trap it for recycling. Call it an artificial tree. MIT Technology Review editor James Temple explores the strategy in a profile of Lackner. Even if the scientific challenges are beaten, governments will need to spend trillions of dollars to deploy the technology.

During a walk across the university’s palm-lined campus in Tempe, [Lackner] says he remains confident that direct air capture is feasible and believes it could get much less expensive if it’s able to reach commercial scale. “But I’m less optimistic that we have the political will to go through that threshold,” he says. Given the high early costs and limited markets, he believes the technology will need significant government funding or tight regulations to be widely adopted—and more government support to cover the cost of capturing and burying the majority of the carbon dioxide that can’t be used.


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As snow blankets the northeast on Monday, perhaps your thoughts have drifted towards the ski slopes. Boston Globe columnist Christopher Muther used to think that the sport was "the brainchild of some sort of Arctic Marquis de Sade." But he resolved to learn how to ski better in 2019. The tale of his recent adventures will alternately make you laugh and cringe.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.