Lyft executive says on track to hit $1 billion in gross revenue

SAN FRANCISCO (Reuters) - Ride-hailing app Lyft, Uber Technologies Inc’s [UBER.UL] biggest competition in the United States, expects to reach $1 billion in gross annual revenue, the company’s co-founder told Reuters.

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Hitting a $1 billion run rate suggests privately owned Lyft has increased market share in some U.S. cities, despite competition from Uber, a larger and better-financed ride-hailing app. Lyft’s net revenue was estimated at $130 million in 2014, according to company financial documents cited by Bloomberg.

“It demonstrates what a large business opportunity this is,” said John Zimmer, Lyft co-founder and president. “The market that we are playing in is ... a $2.25 trillion transportation industry.”

A run rate is a common indicator of future sales and profitability for high-growth, private companies. However, it requires extrapolating annual levels from a small amount of data and is only a projection for how much Lyft could achieve in the next year.

By comparison, Uber’s gross bookings are projected to rise to $10.84 billion this year and $26.12 billion the next, according to a presentation for potential investors seen by Reuters earlier this year.

Based on those figures, Uber’s 2015 net revenue would be $2 billion.

Lyft, founded in 2012, calculated its $1 billion run rate from its gross bookings in October, when the company made about $83 million off of 7 million rides.

That did not include Halloween, Zimmer said, which will be counted in November’s figures and is one of the ride-hailing industry’s busiest nights of the year.

Lyft has more than a 40 percent market share in San Francisco, its hometown, and in Austin, Texas, Zimmer said.

The majority of rides in San Francisco and New York City are through the Lyft Line service, a carpool feature that brings several passengers together to share a car, Lyft co-counder and Chief Executive Logan Green said last week.

Lyft operates in 150 cities and is not available outside of the United States. The company said last month it has more than 100,000 active drivers on its app providing a million rides a week.

Zimmer added that many passengers are hailing 100 rides a month or more.

However, Lyft’s continued growth also hinges on its ability to tap investors for money. A recent pullback in late- and mid-stage investing and the cooling IPO market are expected to make capital tougher to raise for high-priced companies.

Lyft has raised $1 billion at a $2.5 billion valuation, and Zimmer said it still has “the far, far majority of that money in the bank,” without providing specifics.

Editing by Stephen R. Trousdale and Ken Wills