Lyft and Uber lure people with low fares, but how long will cheap ride-sharing last?

Ridesharing giant Lyft went public on March 28 and, earlier this month, its bigger rival Uber said it will soon follow with its own IPO. The IPO prospectus for Lyft and the initial filing to the Securities and Exchange Commission by Uber lift the veil for the first time on the sustainability of their business models and — for now, at least — their low prices.

Ride-sharing services are designed to undercut traditional taxi cabs by allowing passengers to share a ride for a cheaper price. Ideally, this results in higher revenue for the driver, but only if they manage to pick up other customers en route.

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