11–20 of 52 posts
Earlier quoted context omitted.
Misleading in what way? It's gross revenue, not profit.
Some would argue that "gross revenue" should only include the amount that Lyft gets paid, not the amount that they hold in escrow for their drivers. This is more a question of semantics than anything else.
Ah, Uber took money from Google Ventures, that's why Uber is listed as an option in my Google Maps app.
"At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction." Maybe I'm missing something, but isn't the driver's "cut" like 80%+? This seems pretty misleading
It doesn't sound particularly misleading to me. That's just what "gross" means. Gross is always way, way higher than net. You wouldn't subtract the wholesale cost from the gross income of a retail chain, you wouldn't subtract employee wages from the gross income of a software firm, and you wouldn't subtract contractor payments from Lyft.
Earlier quoted context omitted.
Indeed, but when the net is 20% of that it feels pretty misleading (at least to me). "Cut of money the drivers take" being 80%? The wording feels very off
Isn't Amazon's profit margins on sales something like 5% or worse? This doesn't seem any more disingenuous than most other businesses.
Look at Square's S-1 for example, you won't find the phrase "gross revenue" once in the entire document - revenue = net, and they use "Gross Payment Volume" instead.
"At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction." Maybe I'm missing something, but isn't the driver's "cut" like 80%+? This seems pretty misleading
Lyft is still under $200 million and is raising at 25x revenue or so.
"At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction." Maybe I'm missing something, but isn't the driver's "cut" like 80%+? This seems pretty misleading
It doesn't sound particularly misleading to me. That's just what "gross" means. Gross is always way, way higher than net. You wouldn't subtract the wholesale cost from the gross income of a retail chain, you wouldn't subtract employee wages from the gross income of a software firm, and you wouldn't subtract contractor payments from Lyft.
Lyft, and Uber, rely on the fiction that they are merely booking apps for drivers, so the fares belong to the driver, and Lyft and Uber are merely entitled to a portion of the fare for providing the booking service. At no time are they/were they entitled to the entire fare, so booking the entire fare as income flies in the face of good accounting--and, for publicly traded companies, the law.
The only reason startups do this is to artificially inflate their valuations. It's really not much different from cooking the books.
"At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction." Maybe I'm missing something, but isn't the driver's "cut" like 80%+? This seems pretty misleading
Misleading in what way? It's gross revenue, not profit.
Gross profit = gross revenue less expenses (salaries, etc.)
Lyft and Uber are not being paid by the passenger; they are being paid by the driver out of the fare paid to the driver for the service of booking the fare for the driver. Consequently, their gross revenue should only include their % of the fare, not the entire fare.
Importantly, this is one of the reasons that both companies are having trouble with the classification of their drivers. Booking the entire fare as gross income strongly refutes their claims that drivers are independent contractors and not employees.
Earlier quoted context omitted.
Indeed, but when the net is 20% of that it feels pretty misleading (at least to me). "Cut of money the drivers take" being 80%? The wording feels very off
Isn't Amazon's profit margins on sales something like 5% or worse? This doesn't seem any more disingenuous than most other businesses.
"At the Robin Hood Investors Conference in New York on Tuesday, Lyft said it expected to generate about $1 billion in annualized gross revenue next year, a figure that does not account for the cut of money the drivers take from each transaction." Maybe I'm missing something, but isn't the driver's "cut" like 80%+? This seems pretty misleading
When you order something on eBay, a contract is established between you and the seller. You pay the seller $10. The seller gives eBay a cut. eBay's cut is a cost incurred by the seller in providing goods to you.
You're a mall, you lease space to vendors. You have gross income minus expenses.
You're not a logistics provider but merely a platform that connects third party service providers to the customer. You tell everyone how much money you hold on to for the third party service providers as... gross income?
Lyft and Uber et all are more like PayPal, also playing the game of claiming to not be a bank and for awhile not wanting to be a licensed money transmitter.
Last PayPal quarterly earning report they reported $69.74B in payment volume, $2.26B net revenue, $377MM net profit.
That makes sense.
Here Lyft is saying their gross revenue is $2B. Kind of like how Groupon count all the eggs in their basket before paying out their merchant partners.
Maybe a better way to put it is total booking volume $2B, net revenue $400MM, then whatever net profit after expenses.
Valuing the business at 10x on $400MM can make sense. The bet is that Lyft can make more money within ten years by sustaining and increasing the dispatch volume or by increasing efficiency and decreasing costs.