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Lyft Files S-1

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Re: Lyft Files S-1

#251

Post by buboard »

CondensedBrain wrote: post #18
chollida1 wrote: post #4

Some stylized notes: - If they do go public for $20B+ they that would be for more than Twitter and Facebook went public for. Would you really want to own Lyft over FB and TWTR the day they went public? That's a very large ask of the public markets. EDIT To be clear I"m talking about their valuation multiple not the abs valuation. - working with JPMorgan, Credit Suisse and Jefferies. So I guess we know 3 banks who won…

I think investors are mostly betting on self-driving cars being closer than anyone thinks. The first company to get rid of its drivers wins.

what's the cost of the driver? seems marginal compared to the cost of the cars

Re: Lyft Files S-1

#252

Post by halbritt »

throwawaymath wrote: post #185
halbritt wrote: post #172

Earlier quoted context omitted.

Having done a bunch of bare metal, I can tell you the calculus isn't really that hard. Bare metal will save you money. Operating bare metal at scale requires talent that doesn't exist, not necessarily at an engineering level, but at all levels. As an example, I worked at a place that had a large bare metal deployment, i.e. >1MW worth of compute. It was woefully inefficient and costly to operate. The product that they…

Feel free to ignore this, but would you shoot me an email? I'm working on a project that uses bare metal and would like to pick your brain. EDIT: To whoever downvoted this, the commenter hasn't listed an email address, or I would have reached out directly. This is an honest attempt at communication that doesn't require someone to break anonymity.

my username at gmail dot com

Re: Lyft Files S-1

#253

Post by darkwizard42 »

docker_up wrote: post #96
darkerside wrote: post #14

Earlier quoted context omitted.

2017 Compared to 2018 * As a percentage of revenue, cost of revenue decreased from 62% to 58%. * As a percentage of revenue, sales and marketing expenses decreased from 54% to 37%. These seem to be positive signs.

That's like saying "The cancer ravaging your body is down from 62% to 58%" It's a positive trajectory but don't confuse trajectory with absolute value.

Thats how companies work though... no one expects Lyft to be immediately profitable. The company will be rewarded by public markets if its able to keep up that trajectory

Re: Lyft Files S-1

#254

Post by darkerside »

zjaffee wrote: post #124
darkerside wrote: post #14

Earlier quoted context omitted.

2017 Compared to 2018 * As a percentage of revenue, cost of revenue decreased from 62% to 58%. * As a percentage of revenue, sales and marketing expenses decreased from 54% to 37%. These seem to be positive signs.

This also implies that the vast majority (if not all of their) loss is sales and marketing.

From their S-1:

Cost of revenue primarily consists of insurance costs that are generally required under TNC and city regulations for ridesharing and bike and scooter rentals, respectively, payment processing charges, including merchant fees and chargebacks, hosting and platform-related technology costs, amortization of technology related intangible assets, certain direct costs related to bikes, scooters and the Select Express Drive Partner program, and personnel-related compensation costs.

Re: Lyft Files S-1

#255

Post by halbritt »

eropple wrote: post #182
halbritt wrote: post #179

Earlier quoted context omitted.

If you've built a heterogenous environment at the end of three years, then you've failed. The reason that AWS, Google, Azure, et.al do so well is that they don't just buy some servers. They do actual capacity maangement, and not a very good job of it I might add. They also manage the lifecycle of every component in the infrastructure such that the next iteration of that component is understood and interchangeable. Ne…

Fully agreed on all points. But it remains a really hard problem. And when you start to do it out at the scale of something like Lyft, you're gonna blow through your available parts of that $300m (because you can't spend it all up front, obviously) pretty quick. The care and feeding of fleets of (physical) machines is really, really hard and not to be underestimated.

As for the OpEx vs. CapEx argument, that's a non-starter.

If you have $100m OpEx per annum, it'll cost you maybe a point or two to convert that to $300m CapEx.

Re: Lyft Files S-1

#256

Post by chemeng »

buboard wrote: post #183
phamilton wrote: post #61

Earlier quoted context omitted.

100M/year is ~8M/month. Some perspective on that, it could by you one of: ~400PB of data in S3. ~2600 bare metal "x1 type" ec2 instances running 24/7, 3 year upfront reservation. ~60M Write IOPS in dynamodb ~300M Read IOPS in dynamodb ~3500 16xl RDS aurora instances Again, each of those is spending the entire budget on a single service, but that seems like a nonsense level of spending. Maybe they really have that muc…

Why would they have so much data and so much computing. Would they be really dependent on that? Makes it scary to consider what could happens to their passengers if aws is down / hacked.

There is an incredible amount of data, compute and DB hits required to manage dispatching, route planning, cost estimation, dynamic pricing/LTV optimization, ETA estimation, resource positioning and many other optimizations related to every market and every request within a reasonable response time for the customer. Products like Lyft Line are particularly intensive on this front.

Re: Lyft Files S-1

#257

Post by aeternus »

jandrese wrote: post #99
morningmoon wrote: post #46

"We have incurred net losses each year since our inception and we may not be able to achieve or maintain profitability in the future. We incurred net losses of $682.8 million, $688.3 million and $911.3 million in 2016, 2017 and 2018, respectively."

It's pretty impressive that they've managed to lose that much money despite the fact that they are just running a website and an app. Yeah, that's oversimplifying it, but it's not like they own factories or storefronts or need to buy access to expensive services or something. The vast majority of their "employees" are independent contractors with no healthcare or retirement benefits who get paid by the ride (so Lyft…

When starting out in a city, these companies often have a chicken & egg problem around getting to critical mass.

To solve this, they must offer guaranteed minimums to drivers to maintain an available network even with low ridership. Without that, passengers are unlikely to find an available ride and will easily give up on the app.

Those guaranteed minimums are expensive, but are true one-time costs. They are no longer needed once the network is established.

Re: Lyft Files S-1

#258

Post by treis »

throwaway-1283 wrote: post #231
icedchai wrote: post #203

Earlier quoted context omitted.

The public will eat this stuff up if there's huge YoY revenue growth like they've shown in the S1. You see this all the time with public SaaS companies. Sure, the losses also increase... but nobody seems to care.

Nobody seems to care...until the company literally runs out of money. The difference between a SaaS and a Lyft is that Lyft has huge operating expenses. Burn rate is order of magnitude higher.

>The difference between a SaaS and a Lyft is that Lyft has huge operating expenses

Lyft is SaaS (technically a platform) and doesn't really have more operating expenses than any other internet company.

Re: Lyft Files S-1

#259

Post by throwaway-1283 »

jonknee wrote: post #3

2018 revenue of $2.16B, with a loss of $911.3M. Oof. Though as a passenger I can't say I mind buying $2 bills for $1!

The fact this might IPO at $20b is insane...that is the same as United Airlines which made $38b in revenue in 2017 and is profitable.

Re: Lyft Files S-1

#260

Post by throwaway-1283 »

treis wrote: post #258
throwaway-1283 wrote: post #231

Earlier quoted context omitted.

Nobody seems to care...until the company literally runs out of money. The difference between a SaaS and a Lyft is that Lyft has huge operating expenses. Burn rate is order of magnitude higher.

>The difference between a SaaS and a Lyft is that Lyft has huge operating expenses Lyft is SaaS (technically a platform) and doesn't really have more operating expenses than any other internet company.

Are you kidding? The driver acquisition costs are extremely high. Driver turnover is high. There's much higher support costs on both driver and rider side than a typical "pure" software co.
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