Ride-hailing company Lyft's initial public offering is expected to open strongly when the stock trades for the first time on Friday, but the company faces major challenges and is unlikely to kick the competition to the curb.

Lyft increased the share-price range to $70-$72, up from the originally filed range of $62-$68, underscoring strong interest in the deal. Analysts expect the shares to open above the offer price and to climb in early trading.

"I think the stock will do well," David Menlow, president of IPO Financial Network, told China Daily. "But the company's losses are crushing. If there's a visible path to reduce losses, the stock will continue to do well. The company faces challenges in how it classifies drivers — independent contractors or employees. Where's the growth? What new markets can the company break into? After going public, what's next?"

Lyft priced 30.7 million Class A shares on Thursday at $72 each. The shares will trade on Nasdaq under the symbol LYFT. The overallotment option, or additional shares to be offered to investors if demand exceeds the original offering, is 4.6 million shares.

The company plans to convert 219.2 million preferred shares to Class A shares prior to closing the deal. That could eventually drive down the value of shares offered in the IPO.

Lyft plans to use cash raised in the deal for working capital, operating expenses and capital expenses. About 5 percent of the shares have been set aside for the company's directors, select employees, and family members of directors and drivers who serve, or have served, on the Driver Advisory Council.

Lyft plans to pay $1,000 bonuses to drivers who have completed at least 10,000 rides but less than 20,000, and $10,000 to drivers who have completed at least 20,000 rides as on Feb 25, the company said in its registration statement filed with the Securities and Exchange Commission.

Lyft will retain control of the company through its 12.8 million Class B shares that are entitled to 20 votes each. Class A shares offered in the IPO are entitled to one vote per share.

In many cases, mutual funds, retirement funds and activist shareholders dislike two classes of stock.

Institutional investors seek steady returns for their clients, but retaining control through Class B shares permits management to take the long view when building the company.

Lyft's revenue grew to $2.2 billion for the year ended Dec 31, 2018, from $1.1 billion in 2017 and $343.3 million in 2016.

Last December, Lyft had a deficit of $3.6 billion, and losses have continued to grow. However, the company's heavy spending has paid off: Lyft's North American market share increased from 22 percent to 39 percent in the last two years, the company said in its registration statement.

For the quarters ending March 31, 2016, to Dec 31, 2018, the number of rides provided by Lyft has increased from 29 million to 178.4 million. Revenue per rider has grown from $15.88 to $36.04. Lyft keeps about 20 percent of each fare, the company said.

But Lyft warns, "Our limited operating history and evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter."

Uber, a much larger ride-hailing company with operations worldwide, has not yet filed to go public. Its IPO, expected later this spring on the New York Stock Exchange, may be the stronger of the two despite it having larger losses.

Lyft and Uber are similar companies with different business plans.

Lyft is focused on North America and reportedly is growing faster. Uber has used its strong brand to expand into food delivery and bicycle sharing.

Uber is strong is Australia and New Zealand, but sold its operation in China to Didi Chuxing, to Yandex in Russia and to Grab in Southeast Asia. Anti-trust concerns ended prior merger talks between Lyft and Uber.

Uber announced this week that it is acquiring Middle Eastern rival Careem Networks for $3.1 billion, ending a ride-hailing battle and expanding its presence in a region of some 400 million people. The takeover of Dubai-based Careem is Uber's largest acquisition.

Typically, the first deal to market in a new sector gauges investor interest, and the second or third company to go public is often the strongest. This pattern emerged during strong investor interest in internet companies and hardware manufacturers in the 1990s and even played out in the craft beer craze.

Some analysts believe Uber's IPO could value the company at as much as $120 billion compared with Lyft's $23 billion.

"After Lyft goes public, we'll know what the market is willing to pay for the difference between reality and expectations," IPO Financial Network's Menlow said.