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Photographer: Mario Tama/Getty Images North America Photographer: Mario Tama/Getty Images North America

The ride-hailing upstart Lyft Inc. was the first of a new crop of money-losing startups to go public on Friday, raising $2.34 billion in a market debut that saw shares pop from $72 to $78 at market’s close. That values the San Francisco-based company at $22.4 billion, despite the fact that it posted a net loss of $911 million on $2.2 billion in revenue in 2018.

But if you think Lyft’s shortfall is bad, then I urge you to read our story from last week on China’s Meituan, the World’s Greatest Delivery Empire. Led by the deceptively relentless Wang Xing, whose acrimonious battle with Alibaba Group Holding Ltd. makes the Lyft-Uber rivalry look like a game of Words With Friends, the Beijing company delivers meals to people’s doorsteps in 2,800 Chinese cities and has plunged into adjacent business like bike sharing and event ticketing. In 2018, Meituan lost 115.4 billion yuan, or a kind-of-unbelievable $17.2 billion, according to regulatory filings.

Lyft’s red ink and Meituan’s bloody bottom line made me wonder: Can we calculate the total loss for the global on-demand economy in 2018? In other words, what’s the overall deficit that’s resulted from modern man’s collective smartphone-inspired sloth?

Let’s conveniently dub this elusive number the SOFA—or Single, On-demand, shortFall Aggregate. (“Single” as in the global total, “on-demand” for the industry based on gratifying our every desire instantly, and “shortfall aggregate” for, well, the staggering losses.)

Staying in Asia, the ride-hailing juggernaut Didi Chuxing lost 4 billion yuan or $585 million in the first half of last year. Didi has only recently started aggressively cutting costs, as my colleague Lulu Chen reported, so it’s not a stretch to estimate that losses easily exceeded $1 billion for the entire year.

Fiercely competitive in all things, Uber Technologies Inc. also nudged out Didi in the deficit department. It lost an adjusted $1.8 billion in 2018, on $11.4 billion in revenue, a shortfall that would have been worse without the sale of its money-losing Southeast Asia business to rival Grab.

And then there’s WeWork. In the noble pursuit of making it as easy to find a place to open your laptop as it is to hail a cab or order some chicken satay, WeWork Cos. lost $1.93 billion in 2018, on $1.82 billion in sales.

Unfortunately, from there it gets increasingly difficult to calculate the SOFA with any precision. Indian ride-hailing company Ola last revealed financials for the fiscal year that ended in March 2018 and reported a 26.77 billion loss in Indian rupees, or around $380 million. Grab and Go-Jek, on-demand transportation companies in Southeast Asia, have never disclosed their losses. Neither have U.S. delivery startups DoorDash Inc. or Postmates Inc., though it’s fair to say they're spending heavily in pursuit of rapid growth. And that's to say nothing of the litany of other venture capital-fueled businesses, promising to deliver everything from alcohol to mattresses to cannabis to customers' front doors in minutes.

But you get the idea: The on-demand industry probably lost around $30 billion in 2018. That’s a guesstimate—even the companies own pre-IPO financial disclosures may overstate or understate the full amount of cash out the door. I plan to revisit this number when we have more clarity later in the year.

Of course, all these companies are deliberately spending profligately now to build their brands and win over dense populations of customers, so that in the future they can be more efficiently served. This is the exact playbook that once worked for Amazon.com. “We are confident that the business will be very profitable,” Lyft Chief Executive Officer Logan Green told Emily Chang on Bloomberg TV.

But as Shira Ovide has pointed out with respect to Lyft, it’s a significant a gamble. It’s not easy to see how the on-demand company’s expenses, like staffing driver support centers and paying insurance claims, can go down with time. And because so many of them are locked in fierce competitive battles, it will be difficult to raise prices anytime soon.

IPO investors are betting this picture improves when these companies get larger, entice new customers and vanquish smaller competitors. That’s why they appear happy, for now at least, to lounge back on what appears to be a very precarious sofa.

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