“The driver is a free agent. The customer is a free agent. There is absolutely no stickiness in the business, and they know it. That’s the basic problem I have with the ride-sharing business not just Lyft,” Damodaran said.
Damodaran’s criticism of ride-hailing extended to Uber as well, but the company’s valuation is expected to dwarf Lyft’s, with Reuters reporting it will seek between $90 billion and $100 billion.
CNBC confirmed that Uber expects to make public its IPO registration on Thursday and plans to sell about $10 billion worth of stock, making it one of the largest-ever tech IPOs.
Lyft has had a tough go during its first couple weeks on the public market. The stock’s IPO price was $72, but now stands around $63, down more than 9 percent in one week.