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Lyft Files for IPO

reuters.com

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Re: Lyft Files for IPO

#121

Post by Jommi »

CPLX wrote: post #64
a13n wrote: post #56

Earlier quoted context omitted.

There are plenty of network effects. To start a new ridesharing company, you have to get drivers and riders. You'd have to offer them a ton of incentives to start driving/riding with your service, when the existing options are well established. For drivers, Lyft and Uber have incentives (lower fees) if you do the majority of rides with their service, which incentivizes you to only drive with one service. When's the l…

This is just not correct. To start a new ridesharing company all you have to do is attack and carve off the most profitable element of the big company's product mix. All you need is to undercut them in certain high profitability routes, like airport runs, or luxury vehicles for executives, or anything, and you have a toehold. There are some positive network effects, but there are also negative network effects. Having…

Not sure why you're saying the op is not correct. Nothing you said discredits that.

The reality is that both are true.

There are multiple positive network effects at work, as it's evidenced by the growth of these companies.

However the barrier to entry is super low, so competition can be quite high. Like you said, just by subsidizing rides/drivers you will start gaining some market share.

In the end it's all gonna be about who has the most cash and whose efficiency is the highest. Yeah you could hire a promoter and give out flyers outside a venue, but if you check the data, the ROI is abysmal.

Re: Lyft Files for IPO

#122

Post by chrisseaton »

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.

Taxis can't undercut them. Even if Uber were 2x as expensive, that would be ok because Taxis are 4x worse.

Re: Lyft Files for IPO

#123

Post by gnopgnip »

a13n wrote: post #56
RandallBrown wrote: post #51

Earlier quoted context omitted.

Why would ridesharing be winner take all? There's almost no network effect (beyond splitting the cost, but Venmo has largely solved that) and the drivers all drive for all of them. In NYC I think there's at least 4 ridesharing companies and I usually choose which one based on which one has given me a promo.

There are plenty of network effects. To start a new ridesharing company, you have to get drivers and riders. You'd have to offer them a ton of incentives to start driving/riding with your service, when the existing options are well established. For drivers, Lyft and Uber have incentives (lower fees) if you do the majority of rides with their service, which incentivizes you to only drive with one service. When's the l…

From an economic standpoint if the winner is substantially more effective, the cost of producing the product is high, and the marginal costs of servicing additional users are small the system will end up as winner takes all. This is common in the software, sports and entertainment industries.

Because service like Lyft depends on more than just the software to provide the end service so the product is not substantially better. For the most part the drivers are also working for the competition, the time to get to the destination, and the overall cost will be similar. At some level the network effect is part of both the barrier to entry, and the quality/value of the product but it is not clear if this is enough to end up on top of a winner take all market.

Re: Lyft Files for IPO

#124

Post by dangoor »

chrstphrhrt wrote: post #120
docker_up wrote: post #63

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple st…

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

Uber lets you tip now.

Re: Lyft Files for IPO

#125

Post by paxys »

chrstphrhrt wrote: post #120
docker_up wrote: post #63

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple st…

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

Uber has supported tipping for a while now.

Re: Lyft Files for IPO

#126

Post by teen »

chrstphrhrt wrote: post #120
docker_up wrote: post #63

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple st…

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

uber added this like 2 years ago

Re: Lyft Files for IPO

#127

Post by Jommi »

lalaithion wrote: post #68
lewis500 wrote: post #55

Earlier quoted context omitted.

There is a network effect. Imagine if you made a ridesharing app with only one driver. No one would use the app due to high wait times. That's an edge case but it gets the point across: too few drivers and no one will use your app, and if no one uses the app no drivers will enlist in your service.

But drivers aren't locked in to a single service, and there's little to no cost for drivers to be on both Uber and MyStartup, so the network effect is diminshed.

You should read more into this, but even though switching seems easy in theory, the truth is different. Going through another driver application process / training takes time, and even then using two apps creates extra annoyance. You would be surprised how lazy People are even if there was a way to grow their earnings through switching.

Re: Lyft Files for IPO

#128

Post by Jommi »

spaceflunky wrote: post #31
ghaff wrote: post #4

Question that's somewhere between rhetorical and semi-serious. At what point do one of these companies increase their pricing to the point where they can operate profitably and just let volumes end up wherever they end up (making whatever cost cuts they need to on the way down)? Presumably there's some point where you can make money--but maybe not if you have a basically equivalent competitor who is willing to lose m…

No one has seen all the numbers but both services spend an extraordinary amount on advertising, Rider and driver obtainment, market development/setup costs, and legal costs. Like an absolute shit load. Presumably all of those costs would disappear once someone wins the market or a "truce" is called. Right now both teams are spending like crazy in those areas because they need to have best numbers at IPO time. But onc…

You're quite close. There is a also a cost lowering network effect in ridehailing

Re: Lyft Files for IPO

#129

Post by [deleted] »

chrstphrhrt wrote: post #120
docker_up wrote: post #63

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple st…

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

[deleted]

Re: Lyft Files for IPO

#130

Post by parthdesai »

chrstphrhrt wrote: post #120
docker_up wrote: post #63

From a purely investment point of view, why would anyone invest in Lyft over Uber? Lyft has a smaller footprint and only operates in the US (except Toronto). They are more susceptible to economic conditions in a single country, the US, and every point of marketshare they get is a zero-sum game against Uber and presumably expensive because Uber won't give it up for free. Uber has a global operations, is in multiple st…

As a customer experience I prefer Lyft because they let me give tips. I doin't think Uber drivers make a living wage, so I like trying to figure out what can be added to offset the low base/fees so the drivers can do okay.

Tbh i preferred Uber exactly because of no option to tip, but like other people have pointed it out, you can tip in Uber.
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