I ask this question, because there are rumours floating around that suggest the US government and General Motors (GM) are in cahoots to suppress Uber’s $120 billion IPO and promote Lyft.
I first came across the idea via a CCN article by Nicole Grinstead. She has provided an excellent infographic explaining the race between Uber and Lyft, or should I call it a battle, that has been ongoing since Lyft launched in 2012. It shows that in 2015, Lyft got a major influx of investment from China, and in the following year it entered into a partnership with GM. This was intended to improve their share of the ride-sharing market, and advance GM in the autonomous car sector. However, in August 2016, Lyft’s former Chines partner bought Uber China, ending the relationship. In December 2018, Lyft filed for an IPO with the SEC, and later the same day, Uber also filed for an IPO. And so the battle lines were drawn.
The Lyft-Uber IPO battle
Now they are embroiled in an IPO race that is happening in Japan as well as the USA, mainly because the largest investors in Uber and Lyft are based in Tokyo. Lyft is much smaller than Uber, and it is estimated that its IPO will take place this week. Lyft’s co-founder John Zimmer recently claimed that he isn’t worried about beating Uber to an IPO. Maybe, Grinstead writes, that’s because he knew that Lyft’s victory in the rivals’ race to debut on the stock market was guaranteed. She also remarks that if Lyft can get to an IPO first, it will have an advantage over Uber and could topple Uber from its place as market leader.
More competition for Uber
However, Uber faces bigger issues than the Lyft IPO. In February, Daimler and BMW announced their additional $1.13 billion investment in their joint venture to compete with ride-hailing companies. BMW CEO Harald Krueger made a statement outlining a five-prong plan to offer services ranging from ride-hailing and vehicle charging to parking and car-sharing, or in his own words, “To form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously.”
US government and GM in possible conspiracy?
But let’s get back to the conspiracy. As Grinstead says, “GM’s 9% ownership of Lyft could provide cause to suspect a government conspiracy to promote FUD about Uber.” Furthermore, while the US government sold the last of taxpayers’ GM shares in 2013, the government’s 2009 bailout of GM could be said to indicate that the government now wants to ensure GM’s ongoing profitability. And as Grinstead also remarks, GM and the government have been linked in sufficient conspiracies before now to make interference in the Uber IPO not beyond the realms of possibility. Grinstead concludes by saying, “Evidence to support this conspiracy is anecdotal at best. Nonetheless, if Uber is facing secret government opposition, it may be the biggest hurdle standing between them and $120 billion.”
All you have to do is follow the money, because in the end that is what it is all about for the government, GM and the two competitors — Lyft and Uber.