Lyft Revenue Soars in 2016, but Losses Reach $600 Million

Lyft, the second biggest U.S. ride-hailing startup behind just Uber, lost close to $600 million in 2016 while its revenue soared by 250% according to those familiar with the situation.

During 2016, Lyft generated sales of $700 million the people said. However, due to the financials being private, the sources asked for their identities to remain anonymous. The revenue growth of San Francisco based Lyft far surpassed its increase of 46% in losses.

Lyft, it appears has kept its promise to investors in 2016 that its monthly losses would not pass $50 million. The company is aiming to be profitable sometime in 2018.

Lyft does not disclose its financials but remains optimistic related to the company’s future, said a company spokesperson. On Thursday, The Information an online tech news site posted what it said was the Lyft financials dated from 2016.

Uber was headed toward losing $3 billion in 2016 based on its first three quarters. The giant, in ride-hailing, lost $2 billion or more during 2015.

Lyft evolved out of Zimride, which was a previous venture of its founder that was geared toward ride sharing over long trips.

In 2012, Lyft as a ride-hailing service was launched, which was approximately three years after it competitor Uber had been founded.

The two companies remain fierce competitors across the U.S. and the two and their respective supporters see themselves competing in a game of zero-sum, where gains of one take away from the ability of the other to earn a profit.

The two companies spend a great deal on discounts for their riders as well as bonuses for their drivers. These types of subsidies represent a large amount of the losses for the companies.

Lyft said it enabled over 160 million rides during 2016, which would represent a loss of $3.75 per ride. That is a substantial improvement from its 2015 loss of $7.77 per ride.

Uber has attempted to fend off its rival Lyft in the U.S., while it goes through huge expansion across the globe. The busiest markets for Uber are Mexico City and Sao Paulo.

Lyft said it has intentions of expanding to other countries but for now operates just in the U.S.

The growing presence of Lyft in the U.S. has been frustrating to Uber. During the 2016 first quarter, Uber was able to turn a profit in its U.S. and Canada business for only the first time. However, Lyft has taken some of that market share from Uber, and caused Uber to increase its spending in the U.S. for the final three quarters of 2016.

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