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G.M. Invests $500M in Lyft

nytimes.com

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Re: G.M. Invests $500M in Lyft

#241

Post by csours »

rifung wrote: post #185
ssmoot wrote: post #131

Earlier quoted context omitted.

Ford was in bad shape in 2006. Does anyone even remember the Ford of 2006? With their awful Focus when everyone was clamoring for the euro version? Or the Ford 500? They didn't avoid a "bailout" because they were a strong company. Two years earlier they mortgaged everything (including the iconic blue-oval logo) while money was still cheap. It was pure luck. Not strength or some sort of moral superiority. So by the ti…

I apologize if this is incorrect as the only bits I know are from my interest in cars and not finance, but I don't think it was completely luck that Ford decided to try to get money. From what I understand, they did all this because Alan Mullaly just took over as CEO and he wanted to cushion a potential unexpected event. At least that's what it says here: http://www.nytimes.com/2009/04/09/business/09ford.html?scp=5..…

I just finished reading American Icon by Bryce Hoffman.

Ford realized they needed to change long before this; around 2001 (around the same time that Bob Lutz was preaching to GM). Bill Ford and Mark Fields were already planning to do many of the things that Mulally wound up doing.

What Alan Mulally did was still incredibly amazing - he restructured the reporting structure at the top of the company, increased accountability, increased transparency, increased trust and made people deliver on the plans. He got people to surface their problems at the executive level, where before everyone hid the issues for fear it would be used as ammunition against them by fellow executives.

Mulally emphasised the core brands, and in fact wanted to ditch ALL the brands except for Ford. He got Ford to bring over the European models that were far superior to their equivalents in the USA. He brought the Mazda product development model to Ford, where the engineers and designers sit in the same room. He sped up implementation of Global Ford Production System, patterned in large part on the Toyota Production System. He worked with the UAW to decrease legacy costs by funding the VEBA (UAW run healthcare fund) and trading worker concessions for promises to keep production in the USA. He worked with suppliers to decrease costs and increase supplier satisfaction. He reduced the number of dealers.

When I say "he" did these things above, I mean he pushed for them. In almost all instances they were accomplished by other executives and team members.

The discipline and planning were not luck; the timing was very lucky indeed.

Re: G.M. Invests $500M in Lyft

#242

Post by chiph »

askoxyz wrote: post #139
peter303 wrote: post #132

GM had and still has an impressive technical research center. Its just that establishment big companies dont get the respect that startup companies do. Nor can the employees win big like in a startup IPO. General Electric is currently running a humorous TV commercial about this. A hipster engineers friends throw him a "new job party". But they go slackjaw when they discover he joinged GE instead of Facebook. GE has t…

Edison being the guy who ripped off Tesla?

Not ripped off. More like had a major difference of opinion as to how to efficiently produce and distribute electricity. The electrocution of many stray dogs, a death-row prisoner, and an elephant was needed to settle the argument.

Re: G.M. Invests $500M in Lyft

#243

Post by saosebastiao »

GoLocalApps wrote: post #187
saosebastiao wrote: post #155

Earlier quoted context omitted.

I can picture all of those things happening to some extent and still would only estimate a 3-5x reduction in fleet size. In order to get 10x, you are implicitly estimating that rush hour vehicle utilization is currently only 10%. I would estimate that rush hour utilization is in the range of 50-70%. For 10x, you would absolutely have to do something to address peak time behavior. For example, if Mom, Dad, and Junior…

You only need the three cars if you insist on owning the vehicle you're riding it. So if Mom, Dad and Kid all need to be somewhere different at the same time, Uber Pool could work for two of the three, or all three while the car is earning more as Uber Black (or the future equivalent). They only need their own vehicle if they want to ride together.

If Mom, Dad, and Kid need to be in different places at the same time during peak travel time, there is still a demand for 3 vehicles regardless of who owns them. The effect on total vehicle fleet is unchanged.

The better pooling effects of subscription or on-demand fleets mitigate this problem in most scenarios, but it doesn't mitigate it during peak times. Peak vehicle utilization will be what drives total vehicle fleet size.

Re: G.M. Invests $500M in Lyft

#244

Post by frandroid »

ssmoot wrote: post #240
JumpCrisscross wrote: post #140

It is predicted that autonomous cars will reduce America's fleet of vehicles by something like 10-fold [1]. I think it will unfold something like this: FIRST, instead three cars for mom, dad and kid, the average family has one car that drops mom off to work, then dad, and then the teen off to school. SECOND, aforementioned car makes use of its down time to drive strangers around via Uber, Lyft, et cetera. The car's o…

I think it's crazy unrealistic that autonomous cars will be the majority in anything short of 20 to 30 years. The tech doesn't even exist yet. It's taken that long just to see ABS become standard equipment across 90% of vehicles. And this just completely ignores the ~5 to 7 year product cycle. There's no way that in just one or two generations of the Taurus we have a completely self-driving car capable of operating i…

We went from fliphone to total smartphone domination in 5 years.

ABS is a sideshow, not a revolution. As soon as self-driven vehicles are market-ready, we'll see a massive car park upgrade within one car-generation, which I guess is 7 years. Droves of people will ditch their old cars just for the purpose of upgrading.

Re: G.M. Invests $500M in Lyft

#245

Post by Symbiote »

Retra wrote: post #210
deepGem wrote: post #190

Earlier quoted context omitted.

Carpooling in private cars is very different from carpooling in self-driven cars. While you own the private cars, it's very reasonable to expect you not to share the ride with strangers or to occupy another's car. However, if it's a self-driven car which no one owns - it's just like public transit, but way more efficient. Instead of buying a monthly train or bus pass you just pay your self-driven car rental/lease, to…

As long as cars aren't prohibitively expensive and remain symbols of personal freedom and identity, then people will pay for the luxury of not riding in public transportation.

People pay to use trains when the journey time compared to a car is marginal, since they can do something productive on the train.

Some people pay more to use a first-class compartment.

Re: G.M. Invests $500M in Lyft

#246

Post by trillup »

JumpCrisscross wrote: post #140

It is predicted that autonomous cars will reduce America's fleet of vehicles by something like 10-fold [1]. I think it will unfold something like this: FIRST, instead three cars for mom, dad and kid, the average family has one car that drops mom off to work, then dad, and then the teen off to school. SECOND, aforementioned car makes use of its down time to drive strangers around via Uber, Lyft, et cetera. The car's o…

The only thing I'd like to add is that if the car is used this often the utilization rate of the car would significantly increase thus causing the car to go in for maintenance more often. Average mileage on a car is 13,000 per year and if a car is being used to drop the whole family off and then do rides on its own you are looking at 70,000-100,000 on a car per year. You are encouraged to get an oil change every 6,000 miles. Not only that but power trains are engineered with a half life of ~250-300,000 before they become unusable

Re: G.M. Invests $500M in Lyft

#247

Post by kbenson »

RottenHuman wrote: post #156
kbenson wrote: post #135

Earlier quoted context omitted.

The government didn't give money, they invested because the market wasn't in a position to do so when the industry needed it. The narrative that the company is only going to do good short-term because the government gave them a lot of money doesn't make sense when the government has since sold it's position in that company for a profit , meaning the market now viewed that company as a more favorable investment then t…

What you're completely ignoring is the consequences such bailouts have on the market dynamics[1]. It creates a massive morale hazard which can and will incentivize market actors to take part in risky behaviour. If you are seeking to stabilize the "free" market, you are not going to do it by rewarding the losers or picking the winners. Failing is just as important aspect of a self-regulated system as is the price, sin…

I think that depends entirely on whether you saw what happened as the government bailing out GM, or the government keeping an industry from collapsing, which just happened to by by taking the first major company of that industry to fail, and injecting capital. I don't think it would be wise to expect the government to bail GM or any other auto-maker out of a financial problem in all industry conditions and all market conditions. Investors that expect that will lose their money to investors that correctly assess all the preconditions required. I don't expect most investors to be so stupid as to think nothing bad can happen to their investment in a failing company because occasionally extreme measures are taken in extreme circumstances. At a bare minimum, they should recognize that even if a company is bailed out, that doesn't guarantee a positive return, just a theoretically less negative return than before.

Re: G.M. Invests $500M in Lyft

#248

Post by [deleted] »

Merad wrote: post #229
JumpCrisscross wrote: post #140

It is predicted that autonomous cars will reduce America's fleet of vehicles by something like 10-fold [1]. I think it will unfold something like this: FIRST, instead three cars for mom, dad and kid, the average family has one car that drops mom off to work, then dad, and then the teen off to school. SECOND, aforementioned car makes use of its down time to drive strangers around via Uber, Lyft, et cetera. The car's o…

Sorry, I think this is just totally disconnected from the reality of the average American who lives outside of a major urban center. 1. Mom, dad, and kid all need to go to work/school at roughly the same time. If they all have a 15-20 minute commute (well below average for many areas) and the destinations for all three aren't in the same immediate vicinity, we're right back to the family needing 2-3 cars. 2. Eh, no.…

[deleted]

Re: G.M. Invests $500M in Lyft

#249

Post by frandroid »

stevebmark wrote: post #220

I like Lyft quite a lot as a company. However, partnering with another company is often a bad sign. It means Lyft needs more cash and isn't able to innovate enough on its own to survive in the market. Additionally, $500 million to "work on developing a so-called autonomous on-demand network of self-driving cars" is a demoralizing statement. 500m is not enough to complete this goal, especially for such a large company…

Do you even _know_ how much money Uber has raised so far? Lyft is already being outspent by Uber in many aspects. It's not that Lyft doesn't have proper market fit, it's that Uber has raised megatons of cash.

Re: G.M. Invests $500M in Lyft

#250

Post by frandroid »

shaunnestor wrote: post #231

Why do you think GM invested in Lyft rather than Uber? In my experience, Uber is more established, well-respected, leading the ride-sharing movement. Why would GM partner with the seemingly second-place horse in the race?

Uber's price might have been too steep. They probably think they don't need GM.
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