When Lyft went public earlier this year, investors scrambled to grab their piece of the popular ride-sharing platform. But while Lyft is hot on the stock market (the company was valued close to $24 billion), investor demand doesn’t always indicate long-term success and profitability (or the ability to keep hiring top talent).
While short-term success might be good enough for hedge fund investors, the goal for Lyft leadership and employees is long-term growth. However, over the last year alone, the company had a net loss of nearly $1 billion.
Unstable profitability isn’t unique to Lyft, and doesn’t seem to sway investor interest. In 2018, 81 percent of U.S. companieswere unprofitable the year leading up to their public offering, making it clear that tech startups everywhere are struggling to scale, turn a profit, and survive into the long term.
For Lyft to continue to grab market share, it needs to focus on more than just loyal customers. For long-term growth, Lyft must concentrate on hiring smart.