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Lyft Files for IPO

reuters.com

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Re: Lyft Files for IPO

#41

Post by joshklein »

ghaff wrote: post #14
_hardwaregeek wrote: post #11

Earlier quoted context omitted.

Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all local taxi services, then fix prices with their competitors and worry about anti-competitive lawsuits later. Waiting for self driving cars feels like a fool's errand.

When Kalanick was booted, I actually did expect the board to call a timeout and take a hard look at the business model while admitting that self-driving, especially in places that actually have enough density to make taxi-type services generally of interest, is a red herring. It's too far out and it's not clear what the implications are anyway. It's not like Uber and Lyft aren't still a useful service at 1.5x to 2x c…

The usefulness of the service is dependent on the volume. If a 2x price increase cut the volume of passengers dramatically, the volume of drivers would correspondingly fall, and the likelihood of pushing a button on your phone to summon a driver already in your neighborhood likewise falls proportionally. Perhaps to the point where the service is literally valueless.

None of this is to argue against the sustainability of the model, just to point out that no one has any idea what would happen. Network effects matter.

Re: Lyft Files for IPO

#42

Post by davio »

maxxxxx wrote: post #30
ghaff wrote: post #25

Earlier quoted context omitted.

Stipulating that self-driving cars that can operate in dense urban areas in a wide range of weather conditions will exist some day... Lots of people are still going to own cars, especially as you get to less dense areas where parking isn't difficult or expensive and cars are needed on a daily basis to go places, store things, etc. What possible advantage, other than fleeting brand recognition, does Lyft or Uber have…

Exactly. Once self driving cars are there , Uber and Lyft have no advantage other other companies. Rental car companies actually have experience managing large fleets which is something Uber and Lyft don't have.

I worked for one of the rental car companies in this space. They literally don't have the ability to execute the technology required for this. They are better at the labor and capital side that the startups don't want to touch.

Re: Lyft Files for IPO

#43

Post by scottlocklin »

davio wrote: post #16
_hardwaregeek wrote: post #11

Earlier quoted context omitted.

Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all local taxi services, then fix prices with their competitors and worry about anti-competitive lawsuits later. Waiting for self driving cars feels like a fool's errand.

Taxis are really a short term play. Long term is really transport as a service - who owns the market when people no longer own cars.

"when people no longer own cars" -that phrase assumes a lot of things will happen, none of which will obviously happen. The "sharing economy" in general parses to non Bay Area people as "deal with owning less, peasants." Imagining the idea of this being pitched to yellow vests in France...

Re: Lyft Files for IPO

#44

Post by deminature »

lallysingh wrote: post #22
wbl wrote: post #15

Earlier quoted context omitted.

Too easy to enter the market, at least in a small area for price fixing to work.

This exactly. I think eventually we could see a Kayak-like service that just compares rates for your trip against a set and books accordingly. Containing Uber/Lyft/local taxi service/etc. It's very easy to enter the market. You just need a map in a UI (mapbox) and a way to charge people (stripe/square). There's probably a decent market for transportation-service-as-a-service. $1000 gets you all setup with a custom ap…

Have you considered you might be glossing over some of the complexity involved in running operations like these?

Re: Lyft Files for IPO

#45

Post by ghaff »

albertgoeswoof wrote: post #36
saalweachter wrote: post #28

Earlier quoted context omitted.

That's because they've done a shit job of building out a business that could act as the autotaxi. They are terribly placed to take advantage of self-driving vehicles, even if they perfect one, and they are spending in ways that are completely useless towards that long-term goal. A self-driving taxi company is going to look a lot like a car dealership that doesn't sell cars, or a lot like a taxi company that doesn't h…

The UX for self driving Uber === the UX for Uber now The only theoretical differentiator is price. At the moment VC subsides are removing that as well

I'm not sure why the downvotes, you're basically correct. I really don't care much whether it's a person or a computer driving me around. What I care about is the price.

People seem to implicitly assume that autonomous driving will make getting driven around really cheap. But all you're really doing is taking a ~minimum wage driver out of the loop. A good starting point for costs is the $0.50ish/mile IRS mileage deduction which is maybe about half Lyft/Uber pricing today. That's a significant difference but I'm not sure it's a radically alter everyone's behavior difference.

Re: Lyft Files for IPO

#46

Post by mhneu »

ghaff wrote: post #14
_hardwaregeek wrote: post #11

Earlier quoted context omitted.

Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all local taxi services, then fix prices with their competitors and worry about anti-competitive lawsuits later. Waiting for self driving cars feels like a fool's errand.

When Kalanick was booted, I actually did expect the board to call a timeout and take a hard look at the business model while admitting that self-driving, especially in places that actually have enough density to make taxi-type services generally of interest, is a red herring. It's too far out and it's not clear what the implications are anyway. It's not like Uber and Lyft aren't still a useful service at 1.5x to 2x c…

If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them.

I'll let someone chime in who understands the taxi business financials better. But in my observations, Uber and Lyft are only slightly cheaper than taxis. If prices go up, taxi companies will cut into their profits.

I'll also say we (as a society) are very lucky that Lyft emerged as a real competitor to Uber. If one of Lyft or Uber had failed a few years ago, we'd be in a total monopoly situation by now, and "Uber" would have similar meaning as "Kleenex" or "Scotch tape" -- that is, there's only one kind of smartphone ride hailing service and everyone uses it. Maybe that was the play of both Uber and Lyft all along -- stay alive long enough to force the other out and get to monopoly well before autonomous vehicles enter. And they failed. Both are still alive. There is no one firm with a monopoly.

Re: Lyft Files for IPO

#47

Post by ghaff »

davio wrote: post #42
maxxxxx wrote: post #30

Earlier quoted context omitted.

Exactly. Once self driving cars are there , Uber and Lyft have no advantage other other companies. Rental car companies actually have experience managing large fleets which is something Uber and Lyft don't have.

I worked for one of the rental car companies in this space. They literally don't have the ability to execute the technology required for this. They are better at the labor and capital side that the startups don't want to touch.

I don't doubt that's true today. So they either adapt or new entrants displace them. (This is actually a pretty good example of how all companies are needing to increasingly become tech companies to at least some degree.)

Re: Lyft Files for IPO

#48

Post by lbacaj »

I see a lot of comments on here about the efficiency of Lyft/Uber's and lots of comments about their overspending.

The new book by Reid Hoffman, Blitzscaling, was an eye-opener for me as to how these companies operate and what seems as incredibly inefficient now will all be but forgotten tomorrow when they have complete monopolies over all transportation... The nature of technology makes it winner take all almost always, it's only a matter of time until they can offer other forms of transportation to people. Perhaps people someday won't even own any cars at all especially if it's cheaper to call an autonomous one from your device whenever you need it.

These are interesting times we are living in and these business models are completely counterintuitive to traditional norms of taking small risks and that much is obvious from seeing the business models of Uber/Lyft, WeWork, Airbnb, etc.

Re: Lyft Files for IPO

#49

Post by saalweachter »

ryanmercer wrote: post #37
saalweachter wrote: post #28

Earlier quoted context omitted.

That's because they've done a shit job of building out a business that could act as the autotaxi. They are terribly placed to take advantage of self-driving vehicles, even if they perfect one, and they are spending in ways that are completely useless towards that long-term goal. A self-driving taxi company is going to look a lot like a car dealership that doesn't sell cars, or a lot like a taxi company that doesn't h…

>A self-driving taxi company is going to look a lot like a car dealership that doesn't sell cars, or a lot like a taxi company that doesn't have any drivers. They're going to have a huge number of cars, parking lots to store cars that aren't in use, and technicians to service, clean and fuel vehicles periodically. No? You'll need charging stations to charge vehicles and will have enough to meet typical demand, when a…

Just driving around cars that aren't in use gets brought up with self-driving cars all the time, but it's just a terrible idea, even ignoring the traffic considerations. You want them evenly distributed so they can be summoned quickly, sure, but wear and tear on all the expensive parts of a car is proportional to road miles. You want to park them somewhere when they're not in use, and as long as you have peak hours you're going to have times where you need more or less cars.

Re: venture capital use, there are currently 65,000 Uber-affiliated cars in NYC alone, according to a random search. If you were to replace all of those with self-driving cars at $50,000 a pop, that would be $3 billion right there. You can argue they'll only need a tenth that number because of self-driving efficiencies and because most Uber drivers aren't constantly driving (for comparison, NYC allows ~13k taxies) and claim they'll be able to manufacture a self-driving car for half that, but you're still talking hundreds of millions of dollars for a single market.

To replace their current fleet of sub-contracted drivers with self-driving cars is going to cost billions and billions of dollars. Uber currently has something like $7B on hand and is burning through nearly a billion a quarter.

So 2021 comes around, and self-driving technology has been perfected by Uber, Google, Tesla and Ford.

You are a VC -- or a regular investor if Uber is public -- looking to invest in a self-driving taxi company.

Two companies are seeking $10B to build out their world-wide fleet of self-driving taxis. Would you rather invest in Uber, which has a successful ride-hailing App and an internally built self-driving car and is $20B in the hole on VC investment already, or would you rather invest in a newly formed corporation, Bob's Friendly Taxi Company, which has nothing, and is going to use its VC funds to buy a bunch of self-driving vehicles and develop a new ride-hailing app from scratch?

Re: Lyft Files for IPO

#50

Post by ghaff »

mhneu wrote: post #46
ghaff wrote: post #14

Earlier quoted context omitted.

When Kalanick was booted, I actually did expect the board to call a timeout and take a hard look at the business model while admitting that self-driving, especially in places that actually have enough density to make taxi-type services generally of interest, is a red herring. It's too far out and it's not clear what the implications are anyway. It's not like Uber and Lyft aren't still a useful service at 1.5x to 2x c…

If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. I'll let someone chime in who understands the taxi business financials better. But in my observations, Uber and Lyft are only slightly cheaper than taxis. If prices go up, taxi companies will cut into their profits. I'll also say we (as a society) are very lucky that Lyft emerged as a real competitor to Uber. If one of…

>If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them.

I'm sure it varies. I don't use them much when I travel but my perception is that they're maybe 70% or so of the price of a taxi. So not a huge difference but enough that I usually default to Lyft if there's no reason not to.

I agree about the competition. Though that's US-specific. Uber may operate under more regulation generally in Europe but I don't have a lot of personal experience.

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