Lyft, the second-largest ride-hailing company in the US, has had numerous failed attempts of being acquired by bigwigs like General Motors, Apple, Google, Amazon and even its nearest rival Uber according to a new report. However, Lyft has denied the report and hit out at Uber saying it made use of the opportunity and the story was an attempt to impact its business.
Although the reports of GM having talks with Lyft have been in the news for a while, the failed talks with the other companies including Uber was only reported by New York Times last week. However, no specific reason was given as to why these talks failed. Uber CEO Travis Kalanick previously hinted that Lyft was seeking a much overvalued price which was close to $9bn (£6.9bn) as per some reports.
Kalanick said Uber if at all thought of buying Lyft would not pay more than $2bn for it. The company added that it did not want to go ahead because of the antitrust investigation that would follow.
Lyft hit back after these comments and said, "The report is a classic example of Uber using unsavoury tactics in an attempt to impact our business. Lyft is not for sale, we are on a fully funded path to profitability."
However, company sources from Lyft claimed that Lyft, which is currently not in a position where it needs to sell itself, was under fiduciary obligation to its investors to at least consider every legitimate offer from potential buyers. In fact GM, which is currently an investor in Lyft, was the first to make an offer to the ride-hailing app company, but even then it did not reach to a written offer stage.
The company currently has close to $1.4bn in cash, enough to steer it forward although industry experts claim that things could get rough for Lyft. The company has seen 14 million rides at its peak and it is nothing compared to to Uber, which reported 62 million rides in the same month. Most importantly, ride-hailing companies constantly need more resources to compete, a sphere where Uber has a definite advantage.
"One of the challenges for these companies is to figure out how to grow and sustain that latent demand for these businesses, but also to eventually become profitable. Part of the challenge in evolving those services is just balancing out those factors. And that's not an easy task. There isn't a single company that has all of this expertise — software, manufacturing, ride-sharing — under one roof," she said. That's where acquisition comes in," says Susan Shaheen, co-director of the Transportation Sustainability Research Center at the University of California, Berkeley.