It’s a conversation that has happened on and off throughout ride-hailing app Lyft’s history: Should the company go public before its big rival Uber?
I’ve spoken with Lyft investors and advisers, none of whom wanted to be named, to get their thoughts. Each person said it would be a smart business move for the pink-mustachioed company to try an early IPO, but not everyone predicted it would happen. Lyft declined to comment for this story.
It’s no secret that Lyft is far smaller than Uber. It’s in 65 cities in the U.S. compared to Uber’s 60 countries around the world. A 2014 study done by financial firm FutureAdvisor, which analyzed U.S. credit and debit card transactions, said that Uber’s American revenue was 12 times that of Lyft. Uber’s aggression has resulted in its American dominance; even its name has become common slang for “ride-share.”
If Lyft was to go public before Uber, it would steal some of the black car company’s thunder. Consumer tech IPOs are regularly big marketing events. Given that few on-demand companies have gone public, the first IPO of a ride-hailing service would attract a lot of attention.
By going public first, Lyft would also be able to grab early dollars, attracting investors that didn’t have the opportunity to access Uber’s big private funding rounds. Just like Uber injured Lyft’s private fundraising efforts by snapping up a huge array of potential investors for itself, Lyft could try a similar tactic with the public market. Not everyone will have the money or risk-taking appetite to back multiple ride-hailing companies.
Lastly, a comparatively early IPO would give Lyft more money for its battle with Uber. At this point, the former has far less cash reserves — $1 billion — than the latter, which has more than $5 billion. Going public is primarily a way to raise a lot of money and fuel the business’s growth, and Lyft could use that.
Despite the reasons it would make sense for Lyft to go public before Uber, its investors and advisers warned that they weren’t sure that was likely to happen.
One said that since Lyft’s founders, John Zimmer and Logan Green, were “conservative” in their endeavors they might not take the risk of paving the ride-hailing IPO way. Another said that the company wouldn’t want to preempt a public offering if its finances and growth numbers weren’t strong enough for the quarterly scrutiny of the market (see Twitter as an example of why an early IPO doesn’t always end well).
Recent leaked documents said that investors are expecting Uber to go public in 2017, so Lyft has until then to decide.
This article originally appeared on Recode.net.