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Illustration: Lazaro Gamio/Axios

Lyft last Friday was hit with a class action lawsuit by investors in its IPO, who have seen the value of their shares fall precipitously.

My thought bubble: Normally I ignore such cash grabs, as they reek of sour grapes. But this one, with or without merit, highlights a reason why both Lyft and Uber have struggled since going public.

The plaintiffs argue that Lyft hid the ball in several respects:

  1. Failure to disclose that its bike-share program was about to pull 1,000 electric vehicles in New York City over safety concerns. (Unclear that it's material, given that NYC is just one market and the e-bikes were replaced with pedal bikes).
  2. Failure to disclose an increase in surge pricing ahead of the IPO, thus allegedly disincentivizing drivers. (This flies in the face of Lyft's escalating price war with Uber and, even if true, it's not clear how it disincentivized drivers).
  3. Possibility of labor disruptions. (Seriously? You didn't know this? Google much?)
  4. Claiming a 39% market share for North American ride-hail, which the plaintiffs call impossible because Uber allegedly claimed a 65% share.

This last argument about market share discrepancy might just be the result of Uber filing its IPO papers several months after Lyft (i.e., numbers move over time), but it goes to a broader lack of granular transparency by both companies.

For example, we don't know:

  • The exact number of rides by market, broadly or narrowly defined.
  • Per ride revenue, for either the company or the drivers.
  • Number or percentage of discounted rides.

Retailers provide same-store sale data so that investors can better judge the delta between legacy and expansion, but Lyft and Uber don't do anything similar. And when it comes to deeper unit economics, investors are largely left to their own devices, or to trusting amorphous statements about being contribution positive in unspecified large markets.

  • Again, none of this is to validate or invalidate the lawsuit. It's simply to say that it, in part, illustrates a core opacity that I'm told has made some investors stay away, particularly in light of "peak loss" promises.
  • A Lyft spokesman had no comment on the suit.

The bottom line: This is still relatively early days for both companies, and their public fortunes are nowhere near sealed. But when it comes to disclosure, they may need to speed up their maturity.

Go deeper

Ben Geman, author of Generate
Updated 6 mins ago - Energy & Environment

Unpacking Joe Biden's decision to tap John Kerry as his climate envoy

Photo: Pablo Blazquez Dominguez/Getty Images

President-elect Joe Biden is naming former Secretary of State John Kerry as a special presidential envoy for climate change.

Why it matters: The transition team's announcement sought to show that it will be an influential role, noting that Kerry — a former Massachusetts senator and the Democrats' 2004 presidential nominee — will be on the National Security Council.

Dave Lawler, author of World
2 hours ago - World

Oxford and AstraZeneca's vaccine won't just go to rich countries

Waiting, in New Delhi. Photo: Jewel Samad/AFP via Getty Images

While the 95% efficacy rates for the Moderna and Pfizer/BioNTech vaccines are great news for the U.S. and Europe, Monday's announcement from Oxford and AstraZeneca may be far more significant for the rest of the world.

Why it matters: Oxford and AstraZeneca plan to distribute their vaccine at cost (around $3-4 per dose), and have already committed to providing over 1 billion doses to the developing world. The price tags are higher for the Pfizer ($20) and Moderna ($32-37) vaccines.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Vaccines: Key information about the effective COVID-19 vaccines — Oxford University's 90%-effective vaccine.
  2. Health: U.S. coronavirus hospitalizations keep breaking recordsWhy we're numb to 250,000 coronavirus deaths — Americans line up for testing ahead of Thanksgiving.
  3. Travel: Air travel's COVID-created future — Over 1 million U.S. travelers flew on Friday, despite calls to avoid holiday travel.
  4. World: England to impose stricter regional systemU.S. coronavirus hotspots far outpacing Europe's — Portugal to ban domestic travel for national holidays.
  5. Economy: The biggest pandemic labor market drags.
  6. Sports: Coronavirus precautions leave college basketball schedule in flux.