2017 has been a chaotic year for the two most well-known ride-sharing companies. Uber has experienced a tumultuous year resulting in some negative press, the loss of their CEO and a decreased valuation (accordingly to some). Lyft has experienced the opposite. Lyft recently raised another $500 million at an increased valuation of $7.5 billion. https://www.recode.net/2017/4/6/15208672/lyft-value-ride-hail-funding-500-million. Uber has not seen the same growth this year and has continued to hover with a $40-$50 billion valuation for most of the year. https://techcrunch.com/2017/06/22/as-ubers-value-slips-on-the-secondary-market-lyfts-is-rising/
With Lyft, we have seen consistent demand in 2017 for secondary market shares of current and past employees, at even higher prices than the April 2017 round, meaning that investors think it has grown in value quite a bit since then, but also that the ceiling is still quite a bit higher. Arguably, the basis for that is Uber….the most obvious and direct competition.
In working with current and former employees at both Uber & Lyft, we have seen a definite spike in the value of the Lyft shares in the last nine months. None of this comes as a surprise given everything we have just referenced above. Uber, however, has not seen the same spike.
As a side note, I have personally been an “Uber guy” for years, averaging about 300 rides per year. Now, I’ve found myself using both apps and gearing my choice based on price and wait time. I’ve found on numerous occasions that Lyft was not only a bit cheaper but also quicker to arrive. Seemingly, the gap is narrowing.
All of this ties back to the main question: “Which Stock Would You Rather Own?” Well, we won’t speculate on which is the best long-term investment, however, depending upon your situation in holding stock options at either Lyft or Uber, you need to ensure your plan is in place to make things as tax-efficient as possible.
If you are bullish long-term on a company, an exercise and hold strategy in coordination with some liquidity on the secondary market (if necessary) should happen now. As mentioned, we have been working with both companies for several years and can provide guidance and insights on making this process as personal AND valuable as possible.
Contact us today to work on your personalized plan