The second largest company for ride hailing in the United States, Lyft is thinking of raising more money through funding just like Uber, their biggest rival, and this arises questions on their leadership and culture.
Lyft is in talks with the investors about a brand new raise of funds, which would put the valuation of the company to $6 billion, according to the people who have been briefed on this financing. As the proceedings are confidential, they want to remain anonymous. One of them even said that the valuation could go to $7 billion as well.
The valuation of this company was $5.5 Billion last year when investors like General Motors powered as much as $1 billion into the company. It’s not yet clear how long the company is with this fund-raising round and if it would be completed or not.
This San Francisco based cab company had declined to comment. This effort was reported by the Wall Street Journal earlier.
Lyft would competitively bolster the raise of funds as Uber is caught up in some internal problems.
The Chief Executive Officer of Uber, Travis Kalanick was subject to scrutiny in 2017 due to his participation in the economic advisory council by President Donald Trump. There was even a social media campaign where people deleted their Uber app, which made him eventually step down from the council.
There have been concerns about workplace culture for Uber after an employee published her year at the company, which had discrimination and sexual harassment allegations.
Uber also misleaded some journalists about the accidents that was caused by one of their self-driving cars. Uber was also sued by Waymo, the self-driving car business, which came out of Alphabet, saying that they had been using stolen technology in their self-driving cars.
Mr. Kalanick also lost his temper with an Uber driver in a video that was leaked online and this week he apologized for that as well.
Lyft had been an underdog to the Uber brand for a long time. Lyft is just US-based, whereas Uber is a global company. The two have even engaged in wars on pricing and also bad mouthed each other. Last year, Lyft was about to sell itself off as it held discussions with Didi Chuxing, Uber, Amazon, Google, Apple and General Motors, but there was a disagreement of price, which scrapped the deal.
If we compare Lyft and Uber on a financial aspect, then neither has emerged as a sound business. The battle between them has caused them to lower their price and offer a lot of deals to lure in customers and maintain the share of their market. Covering the costs has been harder for both the companies. Both the companies are still unprofitable and need investment capital to fund their business.