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The view of one Lyft driver about the IPO

Video Credit: Reuters Studio - Duration: 02:26s - Published < > Embed
The view of one Lyft driver about the IPO

The view of one Lyft driver about the IPO

Ride hailing app Lyft is listing on the New York stock market Friday with a lot of investor excitement, but one driver tells Reuters, he's steering clear of the stock.

Jane Lee reports.

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The view of one Lyft driver about the IPO

SOUNDBITE: LYFT DRIVER, JON KESSLER, saying: "I'm a little hesitant to purchase stock at the IPO price given that, and it's same thing with Uber, it's just two companies that have never made money." That's at least the view of Jon Kessler who's been a Lyft driver in San Francisco for over four years.

The ride hailing app goes public on the stock market on Friday.

And drivers with over 20,000 rides, who seem to be like unicorns themselves, get $10,000 dollars in bonuses for the occasion.

Kessler gets a thousand dollar bonus for shuttling over 10,000 rides - which he can either pocket or use to buy Lyft shares at the listing price on Friday.

But Kessler says he's taking the cash.

SOUNDBITE: LYFT DRIVER, JON KESSLER, saying: "How can a company with basically zero physical assets that has yet to turn a profit have all this financial value in the marketplace." Investors don't seem to agree.

Reuters tech reporter Heather Somerville.

SOUNDBITE: REUTERS CORRESPONDENT, HEATHER SOMERVILLE, saying: "Enthusiasm as expected for Lyft's IPO has been huge//But what this enthusiasm does not account for is that Lyft last year lost $911 million dollars.

This makes it the most loss making company ever to have an IPO.

That of course will be overshadowed by its rival Uber who will go public in the coming weeks after having lost more than three billion dollars last year." Lyft is seeking to fetch a valuation of over $24 billion dollars.

Uber is aiming for $120 billion.

But even as the Silicon Valley startups get to the stock market they're still struggling with fundamental business issues - drivers.

SOUNDBITE: REUTERS CORRESPONDENT, HEATHER SOMERVILLE, saying: "Lyft like Uber has drivers who work as independent contractors.

There's been a lot of pushback on that classification both from the California Supreme Court and other court cases as well as from the drivers themselves many of whom have sued saying that they should be treated as employees." Drivers have also been increasingly complaining about lower pay as both companies cut drivers' rates.

Kessler, once a taxi driver, says he sees the writing on the wall.

"All the ride share business is deregulation of what was a regulated market.

And so historically that's always what happens, is that it's a race to the bottom///And that's not going to stop until one of them Falls out."




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