Lyft is coming to a strange sort of crossroads. The second largest ride-hailing company in the United States behind Uber (but by a mile) is seeking a variety of suitors for a buyout. However, none so far has been successful, and so the company, with gas in the tank — or, rather, $1.4 billion in the bank — will keep on driving.
First, reports surfaced last week that General Motors, who partnered with Lyft in January as part of an effort to create self-driving ride-share cars, wanted to buy the company outright. The two businesses didn't reach a deal in the end: While the Information claimed that GM had named a price, though one not specified by the tech news website, Bloomberg Technology followed up, saying that GM bid somewhere in the neighborhood of $5.5 billion, which makes sense given that amount is the valuation at which the automaker invested in the ride-hailing company. And yet no formal offer was made.
Then, later last week, the New York Times wrote that GM wasn't the only potential buyer: Apple, Google, Amazon, Uber, and Chinese ride-hail company Didi Chuxing were all reportedly approached. Lyft reportedly has help from Qatalyst Partners, an investment firm, in seeking buyout offers.
Recode reported that one holdup for a sale might be a rumored $9 billion asking price, though the company supposedly lowered that in talks. Uber indicated it might consider buying its rival if the price were under $2 billion according to Bloomberg, though such an offer or statement might simply aim to de-value Lyft. Uber CEO Travis Kalanick is reportedly against acquiring Lyft to avoid antitrust concerns.
While Uber's war chest is much larger than Lyft's, a continued fight between the two companies to lower prices and subsidize rides will be many times more expensive for Uber. That's because Lyft's peak has been 14 million rides in one month, and that was a month during which Uber did 62 million rides.
Yet Uber, having sold its Chinese branch to its Chinese rival Didi Chuxing and essentially admitting defeat there, is now freer to focus on its US market. That could signal that it plans for an IPO, an event that would go better if the competition (cough cough Lyft) were already driven off the road.
Previously: General Motors Just Tried (And Failed) To Acquire Lyft