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Lyft Files S-1

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Re: Lyft Files S-1

#161

Post by windyaskew »

cm2012 wrote: post #6

Some notes: - They claim their US ride sharing marketshare is 39% - that seems high to me. - $800 mil in marketing spend in 2018 from $500 mil in 2017 - they say this increase was largely driven by cost of acquiring new drivers. I honestly thought this would be higher as a % of revenue - this topline number also includes spend on promotions/discounts for passengers.

From this article [1] posted a few days ago, TC says 34% (Uber is at 66%) and that's due to running at a larger loss by offering discounts to riders. Gaining 4% market share is no small feat but doing it by giving discounts isn't exactly a long-term vision.

[1]: https://techcrunch.com/2019/02/26/heres-why-youre-getting-al...

Re: Lyft Files S-1

#162

Post by lmm »

carlisle_ wrote: post #138
CondensedBrain wrote: post #60

Earlier quoted context omitted.

Then they slowly turn into a datacenter company and lose sight of being a ride sharing company. That's the same reason billion dollar companies rent buildings instead of owning them.

Uber hosts its own infrastructure, so does Google, so does Facebook. All three of those companies have no problems remaining focused on their business models without turning into a "datacenter company." I strongly dislike the notion that on-prem hosting is somehow a bad thing, or too cumbersome, or otherwise totally solved by cloud providers. AWS specifically is hugely convenient in a number of ways, but it doesn't c…

Google have struggled to retain focus. And when they started out, they chose to compete on datacenters as a core competency: their corporate history is full of the idea that they could run a search engine cheaper/better than competitors by using commodity PCs and that kind of thing.

Facebook is a similar story: being the biggest website in the world is a core competency for them, and one of the ways they outcompeted rivals early on was by scaling their website better.

Uber has yet to turn a profit.

If datacenters are a part of your business proposition - not necessarily "we're selling datacenters to other people" but rather "we will be able to outcompete our rivals because our datacenter strategy will be better" - then self-hosting makes sense. But if the datacenter is a commodity from the point of view of your business - and I would assume that would be the case for Lyft - then it makes sense to buy off the shelf.

Re: Lyft Files S-1

#163

Post by misun78 »

jjeaff wrote: post #137
Fordec wrote: post #8

Earlier quoted context omitted.

20% of Uber's revenue with 50% in losses.[0] I want to see Lyft succeed just to counter Uber, but yeah, those numbers need to be healthier [0] https://www.reuters.com/article/us-uber-results/uber-posts-5...

That fully depends on what the losses are. I haven't read their financials, but if the losses are from expansion and other investment but their unit profitability is good, then it's not a problem. They can always pull back on investing in growth just to reap profits.

But this is where their one-trick pony hurts them. Where will growth come from if they stop growing in the one market they're currently in?

Re: Lyft Files S-1

#164

Post by mech4bg »

cabaalis wrote: post #28

> In 2017 and 2018, certain of our named executive officers provided rides to riders using the Lyft platform in a similar manner as other drivers. We believe that these driving activities provide the named executive officers with substantial practical insight into how our platform serves drivers. I thought this was a pretty interesting point. I was about to call it dogfooding but not quite, since it's more of an expe…

I had one of the VC investors in Lyft pick me up for a ride a few years ago in Menlo Park. Had a super interesting conversation - I was impressed they were scoping out their investment directly. I wasn't sure what the protocol for tipping as at the end, hah.

Re: Lyft Files S-1

#165

Post by theossuary »

doctorpangloss wrote: post #157
munchbunny wrote: post #112

Earlier quoted context omitted.

Maybe. Running your own infrastructure at large scale is actually really hard and therefore surprisingly expensive in risk and talent cost. If you look at how big the internal infra teams are at companies that host their own infrastructure, they're often individually the size of growth stage companies. The problem is that provisioning, reliability, and security are by themselves really tough problems. If those issues…

> If those issues aren't in your company's core competencies, it's not necessarily efficient to invest in building out all of that. Maybe that's just the story cloud providers tell you. Until you try, do you really know if it's all that complicated? People have been running datacenters for a long time, and not all of them work for Amazon. But there may be also a beneficial side effect of having gearheads around, and…

Yes, I've worked with a few of those datacenters. A few examples:

- Recently had to purchase new servers, because of signed contracts the only servers we were allowed to purchase and put in the datacenter were four years old and technically EOF.

- Firewall changes, AD changes, provisioning a VM, etc. are 48 hour turnaround. Purchasing new hardware requires 4-6 weeks.

- Had an intermittent issue with their edge firewall, it'd slow certain connections to a crawl and eventually they'd timeout. Took six months to fix it, for the first three months they told us it wasn't their fault (turning off their deep packet inspection ended up fixing it). I still remember when we opened the first ticket about it, and the reply was "no other customers are experiencing problems" and it was closed.

That's just a few examples of how painful it can be. To give you the other side of the coin, having worked with an enterprise contract in AWS, we were having an intermittent issue with DNS resolving failing for a few seconds every few days. They put an engineer on it full time till they found the problem (we misconfigured it), and it didn't cost us anything more than the enterprise support. I was actually shocked they'd invest that much on such a vague issue.

Yes AWS is expensive, but you're getting world class engineering proven at scale, and access to some very smart/motivated people to support it (and they have access to the teams who built it, when they can't solve it). I don't think I'd ever choose managed datacenter over AWS/GCP/Azure/etc. Either do it in-house where there's accountability, or use cloud providers who have proven they're competency.

To be clear, I'm talking about VPC/EC2/etc. I can't really discuss a lot of their higher level and newer managed services; they either weren't as good, or I haven't tried them. But the bedrock these clouds are built on is solid, and that's worth paying good money for.

Re: Lyft Files S-1

#166

Post by spullara »

randomacct3847 wrote: post #7

Biggest thing I noticed is that the cofounders only own a little more than 1m shares each, which is less than .5% each! Painful amount of dilution....wow.

This isn't accurate. He has another ~6M shares of class B, look at footnote (1) for his holdings:

"Consists of (i) 4,663,809 shares of Class B common stock held by El Trust dated August 3, 2015, for which Mr. Green serves as trustee, (ii) 675,564 shares of Class B common stock held by The Green 2014 Irrevocable Trust dated June 12, 2014, for which Mr. Zimmer serves as trustee, (iii) 360,979 shares of Class B common stock held by The Logan Green 2016 Annuity Trust, for which Mr. Green serves as trustee, (iv) 360,979 shares of Class B common stock held by The Eva Green 2016 Annuity Trust, for which Mr. Green’s spouse serves as trustee, (v) shares of Class B common stock issued pursuant to the Founder Option Net Exercises and (vi) 1,180,329 shares of Class A common stock underlying RSUs for which the time-based vesting condition would be satisfied within 60 days of December 31, 2018 and assuming the satisfaction of the performance-based vesting condition. Subsequent to December 31, 2018, a portion of the shares described in this footnote were transferred between the trusts described in this footnote for estate planning purposes."

Re: Lyft Files S-1

#167

Post by lmm »

stepanhruda wrote: post #155
jonknee wrote: post #51

Earlier quoted context omitted.

On the other hand, the baseball player will create much more than that in value while Lyft has lost billions of dollars. If someone here is underpaid it's not the Lyft founders.

What value is exactly a baseball player creating? Lyft has provided WAY more value to society over its lifetime.

The baseball player brought joy to other humans, which is the whole bottom-line point of the entire economic system.

Lyft has burned piles of investor cash to give people artificially cheap taxi rides; the wealth-transfer is zero-sum and it's actually worse than that because their dumping distorts the real transport market (and exacerbates the negative externalities of cars). You could argue they've done some genuine value creation by being a more efficient taxi dispatcher, but if there was any substance to that then they'd have a profitable business.

Re: Lyft Files S-1

#168

Post by ndarwincorn »

carlisle_ wrote: post #149
cheeze wrote: post #147

Earlier quoted context omitted.

Google is a bad comparison here IMO because Google IS a datacenter company. No different than Amazon... They run datacenters and offer IaaS to customers, and piggy back off of that. I agree with you on Uber and Facebook though.

Google wasn't really a cloud provider for like 15 years and hosted their own infrastructure that entire time.

That's not exactly fair, the first decade+ of that pre-dates the public cloud.

Re: Lyft Files S-1

#169

Post by jamesfzhang »

randomacct3847 wrote: post #7

Biggest thing I noticed is that the cofounders only own a little more than 1m shares each, which is less than .5% each! Painful amount of dilution....wow.

This is incorrect. The S-1 shows asterisks for the co-founders and are likely just placeholders. In the previous S-1, it showed that they owned roughly 7% together.

https://twitter.com/MikeIsaac/status/1101542615042801664

Re: Lyft Files S-1

#170

Post by eropple »

peteradio wrote: post #143
freewilly1040 wrote: post #95

Earlier quoted context omitted.

With cloud vs DC you also needs to consider that re-sizing datacenter space is a very slow process, and if you're wrong about how much you need it's a massive pain. Buy too much and you're wasting money, buy too little and you're stuck throwing eng time at scrambling to keep your services from falling over, and bottlenecking your entire org with resource constraints. That's not a judgement on whether it's worth it fo…

But let's say you have a 300m budget.

You don't, though. You have room for $300m of opex, coming in over time and allocated, as mentioned, around $8m a month. Less early on, more later.

If you gave me $300m to spend, largely up-front, for significant capex purchases? Sure. We could do it. The team I would build would also probably still make mistakes that AWS et al have already largely learned how to avoid, but we could do it. But capex and opex are very different beasts. By the end of that three years I'm already looking at spending way more to refresh what I bought at the start of that three year period because I'm starting to near the end of early contracts and I'm figuring out how best to wrangle, in a way that makes the rest of the business succeed most optimally, a now-heterogeneous environment, etcetera etcetera and etcetera. It's all solvable. But whether it's cheaper, at scale, and more reliable, and presents a unified tool for use by the business...that's a harder question.

Understanding how capex and opex work and how they differ is pretty critical to successfully running an engineering organization, to say nothing of a company.

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