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Lyft Files for IPO

reuters.com

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Re: Lyft Files for IPO

#211

Post by jiveturkey »

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…

> every point of marketshare they get is a zero-sum game against Uber

well, marketshare (a percent value) is by definition a zero-sum metric. however, what you mean to say, that every new customer of lyft is a customer less for uber, is false. there is no network effect, like social networks or marketplaces. new customers for uber may also be customers of lyft, and in a true rising tide, and one company may prime the market for the other.

Anyway, as the smaller player, given the lack of rider network effect and the clearly established lack of driver loyalty, they could quite easily see much faster growth. (going from 1->2 is much more significant that 100->110, eg). And growth rate, not absolute market value, is what investors really care about.

Re: Lyft Files for IPO

#212

Post by spaceflunky »

marinman wrote: post #116
spaceflunky wrote: post #31

Earlier quoted context omitted.

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…

"Presumably all of those costs would disappear once someone wins the market or a "truce" is called." I'm not sure any single company ever truly wins this market because, as others have mentioned, the barriers to entry are pretty low. Raise VC money to subsidize the most lucrative rides/markets and Lyft & Uber will never be able to stop their spending (either through advertising or through acquiring new entrants). The…

>The ride-share market may wind up like the airlines: heavy utilization but not amazing businesses.

I think that's more or less what I was trying to get at. Once you build your place in the market, competition can and will come along, but you'll be so entrenched, just like the airlines, you can just cruise along (no pun intended) with very little spent on ads or customer acquisition.

Re: Lyft Files for IPO

#213

Post by calvinbhai »

jazzkingrt wrote: post #204
pmart123 wrote: post #195

Earlier quoted context omitted.

Southwest Airlines for a long time just focused on point-to-point flights, avoiding money-losing flight patterns that routed passengers through a Chicago to New York type connection. Additionally, SWA only maintained 737's, and free checked baggage allowed for faster onboarding and deplaning, and therefore, faster turnaround times. Eventually, this little airline became the largest airline after the major airlines bo…

What a great example! I'm realizing that perhaps the "second mover advantage" may be more pronounced in markets with low switching costs. Flyers can easily compare airline prices against one another, and drivers are incentivized to boot up 2nd, 3rd and 4th driving apps. Low-margin businesses can't afford to spend as much on R&D, make mistakes, etc. They have to win with small executional advantages.

IIRC, Lyft was the first mover, Uber shamelessly ripped off Lyft's model that anyone can be a driver and come out with Uber X. So, imo Lyft was the first mover, but was smart to let Uber face all the heat sacrificing short term growth for long term success. Uber has been in too many things for me to believe that they can sustain the business (I may be wrong)

Re: Lyft Files for IPO

#214

Post by hibikir »

fjabre wrote: post #6

Is there any upside to staying private if you're profitable?

Absolutely: A major one is that you can skirt all kinds of financial disclosure laws that apply to public companies. The world doesn't get to know your volume, your profit margin, or which of your divisions makes most if its money. This means your competition has a lot more trouble competing with you than if you have to provide public quarterly statements. I have seen examples of well run companies that just happened to be private, and then see industry reports that made hilariously wrong guesses regarding those key metrics that the competition would love to know.

At the same time, it's far harder to provide great compensation to your employees if they can't sell their shares in the market, and at some point, your investors might be screaming for liquidity. But staying private as long as you can get away with is a good idea: It's just that few companies planning to be huge can.

Re: Lyft Files for IPO

#215

Post by dcposch »

the_reformation wrote: post #200

The most exciting implication here is that we can finally pour over the financials of a major ride-hailing company. Whether these companies have the unit economics to succeed is, remarkably, still an open question.

Sorry to be a grammar right wing populist, but it's "pore over".

To pore is to think deeply about to something, to dwell on it.

A pour-over is a type of coffee.

Re: Lyft Files for IPO

#216

Post by perl4ever »

mikekij wrote: post #83
bagacrap wrote: post #69

Earlier quoted context omitted.

Even if you invest purely cynically you might reasonably believe that Uber's toxic culture will eventually catch up with them.

This. Why would anyone invest in Apple in 1998 instead of Microsoft?

I am not sure if you meant that the other way around. In 1998, Microsoft was the larger company, with the more evil reputation, which seems to parallel Uber.

Re: Lyft Files for IPO

#217

Post by perl4ever »

CPLX wrote: post #82
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…

Maybe because you believe that the investment of yourself and others will be profitably used by the company, and you'll be able to share in those profits. An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business. It's quite possible this will give them the fuel for that expansion you mention.

"An IPO isn't a bet, like at a racetrack, the money raised is actually used to further the business"

Is it, or is it just used to pay back the early investors who want to exit?

Re: Lyft Files for IPO

#218

Post by Waterluvian »

dcposch wrote: post #215
the_reformation wrote: post #200

The most exciting implication here is that we can finally pour over the financials of a major ride-hailing company. Whether these companies have the unit economics to succeed is, remarkably, still an open question.

Sorry to be a grammar right wing populist, but it's "pore over". To pore is to think deeply about to something, to dwell on it. A pour-over is a type of coffee.

Never knew this. Thanks for sharing.

Re: Lyft Files for IPO

#219

Post by tathougies »

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…

Uber makes countries hate them and countries and cities are free to kick Uber or any business out. Lyft respects laws and so is less subject to legal risk.

Re: Lyft Files for IPO

#220

Post by Daegalus »

dcposch wrote: post #215
the_reformation wrote: post #200

The most exciting implication here is that we can finally pour over the financials of a major ride-hailing company. Whether these companies have the unit economics to succeed is, remarkably, still an open question.

Sorry to be a grammar right wing populist, but it's "pore over". To pore is to think deeply about to something, to dwell on it. A pour-over is a type of coffee.

This makes a lot of sense. I have never seen Pore-Over written right, and pronounced, I always thought it was Pour and as an immigrant (even though i came here when I was 5 years old) it never quite made sense, but I went with it. Now that I know the word "pore" exists with this definition, it makes so much more sense.
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