CNBC's Fast Money, NYU's Aswath Damodaran explained that there's a fundamental problem with Lyft's business model that may have helped the company grow fast, but prevents it from making money.
When Lyft went public on March 29, it was valued at more than $20 billion, with shares priced at $72. Lyft shares have since declined and closed below the IPO price at $70.23 today, in part because of investors' worries over its nearly $1 billion in losses last year, and its high valuation.
On CNBC's Fast Money, Damodaran explained there's fundamental problem with Lyft's business model that may have helped the company grow fast, but makes it hard for the company to make money: At least Lyft is focused, and not committed to expensive, risky side projects like Uber, Damodaran noted. Damodaran said:"I'd take Lyft over Uber because Uber wants to be all things to all people. You'd think they'd learn from their mistakes. They tried in China and had to back out of China. I think being less ambitious in this business, until you figured out a business model, is better."
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