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Striking Uber and Lyft drivers protest Uber's decision to cut per-mile pay from 80 cents to 60 cents, outside the Uber Hub in Redondo Beach, California, U.S., March 25, 2019. REUTERS/Lucy Nicholson - RC1B982A0D00
Reuters/Lucy Nicholson

The tech IPO economy has few winners and lots of losers

Member exclusive by Gwynn Guilford for The tech IPO boom

We may look back on Lyft’s initial public offering as the end of a beautiful era, a time of plenty. For well-off city-dwellers, anyway.

The business model that landed Lyft on the Nasdaq hinges on attracting users at (literally) any cost—a strategy made possible by staggering sums of venture capital investment. Lyft’s not alone, of course. Backed by VC riches, countless consumer-focused digital platforms have made everything from housecleaning to grocery shopping, laundry delivery to watermelon apportionment, available to their affluent target markets at deliciously deep discounts—sort of like food stamps for urban hipsters. Quartz’s Alison Griswold summed up what’s really going on here, observing that the fat years of VC tech spending “have been less an innovation than a giant wealth transfer, from the VCs and startups they funded to the lucky consumers who got a free lunch along the way.”

Okay, but if venture capitalists want to blow their lucre on, say, feeding Manhattanite millennials free cookies, that’s their problem. Who cares?

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