As discussed on this blog recently, gig economy companies have been changing the face of employment with more and more people being employed and impacted by the rising industry. On March 29, Lyft added to this evolving story with its successful trading debut.
Lyft’s shares rose 8.7%, rising to $87.24 from its $72 offering price. This, it’s noted, makes Lyft “one of the most valuable American companies to go public in the last decade.” However, things haven’t been entirely rosy.
While Lyft has been expanding and diversifying the types of services it offers, it, along with other ride sharing and gig economy services, has been hit with lawsuits challenging things like the ability for drivers to receive benefits. There is also the question of how profitable Lyft and other companies can be.
These concerns were quickly reflected, as Lyft’s initial successful trading open was met with a decline in share price on the following day of trading. Of course, these are very early days in Lyft’s life as a publicly traded company, and the picture of where things will go is far from certain. However, the early volatility may be cause for concern, and not just for shareholders.
With Lyft coming in as a hugely valuable company the question becomes what if it and other gig economy companies, are not able to sustain business? What if, despite expansion, profits don’t follow? With a seemingly increasing portion of the population working in the gig economy its failure on any level could be dramatic for many workers across the country. Of course, there are also signs that the gig economy is learning and growing and could very well find its way to sustainability and profitability, as mentioned in our prior post with new companies rising to fill gaps in the needs of gig economy workers.
Lyft, and other gig economy companies, progress is important to monitor. Given the expanding forms of services offered, it’s important for companies of all stripes to keep on top of how the advancement of these companies could impact them, if not in the services they provide themselves, then certainly in the changing needs of workers going forward. Doing this with an experienced legal team will help any company plan for an increasingly uncertain future.