Lyft, the ride sharing company, announced its annual gross revenue amounting to a billion dollars in October.
As reported by Tech Crunch, the figure presented by the company may likely does not represent its cut of the value of rides that flow through its system. Instead, this may represent the gross, or just the total number of payments between the Lyft drivers and riders.
Lyft serves as the middleman between the driver and the passenger. The company gets its revenue by taking a percentage of the payment between the two parties. As noted, the rate is usually estimated to be at 20 percent, the same with its closest competitor, Uber.
However, there have been reports that Uber took larger cuts in some contexts and add to the fact that Lyft drivers said on several occasions that if they drive a certain number of hours per week, the company's cut is refunded.
And if the 20 percent cut is indeed true, Lyft's share of the $1 billion in aggregate revenue of its service would bring it around $200 million -- a solid number for being a "middle man."
But analysts are saying that the company has not recorded $1 billion in gross revenue; but, instead it reached that point on a run-rate basis, meaning that the company's October gross revenue, times 12 would equal to at least $1 billion.
To make it simple, $1 billion if divided by 12 months, is $83.33 million that is the gross revenue. Lyft's cut, using a simplified 20 percent metric, comes to $16.66 million for October top line. Although not as big, it still is a decent profit.
In a related report by Reuters, a run-rate is a common indicator of future sales and profitability for high-growth, private companies. However, it requires much extrapolating annual levels from a small amount of data and is only a projection for how much Lyft can potentially achieve next year.
Compared to Uber, the company's closest rival's booking are projected to rise to $10.84 billion this year and $26.12 billion in the next, according to a presentation for potential investers.
And based on those figures, Uber's 2015 net revenue would be around the $2 billion mark.
In addition, The New York Times have reported that Lyft is seeking $500 million in funding at a valuation of approximately $4 billion, according to an anonymous source.
That's up from the company's current valuation of about $2.5 billion. Although the figures are still in flux and may change as fund-raising talks continue.
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