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Lyft Files S-1

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Re: Lyft Files S-1

#321

Post by bhelkey »

panarky wrote: post #303
40acres wrote: post #62

The prediction was that ride-sharing would become a winner take all market and that Lyft and Uber would fight it out to attrition, but I'm not sure if this is the case. Both of these companies are massive and I don't see one reaching escape velocity to leave the other in the dust. At a point the losses will matter and the realization will need to be had that the other will not die.

Friends and family social networking is a winner-take-all market because your friends lock you in. Messaging for gamers a la Discord is a winner-take-all market because fellow gamers lock you in. But from the rider perspective, there's very little lock-in for ride sharing services. Just install a new app and the car shows up. Doesn't matter if your friends use it. There's no moat. Ride-share lock-in is on the provide…

It's not a social network lock in, its a marketplace lock in.

If the majority of riders are on one app, that's where the drivers will go. If the majority of drivers are one app, that's where the riders will go.

Think Craigslist not Facebook.

Re: Lyft Files S-1

#322

Post by taurath »

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!

I dunno, they’re just as expensive to get to JFK from Manhattan as a yellow cab. Maybe they’re loss leading in small markets

Re: Lyft Files S-1

#323

Post by borgel »

mech4bg wrote: post #164
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.

Interesting. I had a VC Lyft driver once too.

Re: Lyft Files S-1

#324

Post by luminiferous »

bhelkey wrote: post #321
panarky wrote: post #303

Earlier quoted context omitted.

Friends and family social networking is a winner-take-all market because your friends lock you in. Messaging for gamers a la Discord is a winner-take-all market because fellow gamers lock you in. But from the rider perspective, there's very little lock-in for ride sharing services. Just install a new app and the car shows up. Doesn't matter if your friends use it. There's no moat. Ride-share lock-in is on the provide…

It's not a social network lock in, its a marketplace lock in. If the majority of riders are on one app, that's where the drivers will go. If the majority of drivers are one app, that's where the riders will go. Think Craigslist not Facebook.

There's nothing preventing drivers from driving for multiple apps, though. Most Lyft/Uber drivers I see these days have both stickers in their windshield.

Re: Lyft Files S-1

#325

Post by arcticbull »

dwild wrote: post #204
throwaway-1283 wrote: post #148

Earlier quoted context omitted.

I don't see how these companies will stop losing $1b+ a year each year. The public markets will not be too kind. The end game was supposed to be autonomous taxis (cutting the driver out). I don't see how that's going to happen before they run out of money unless they 1) significantly raise prices or 2) take increasingly bigger cuts from drivers. Personally I will be shorting as soon as I can.

> I don't see how these companies will stop losing $1b+ a year each year. The public markets will not be too kind. Are you saying taxis can't exist? As far as I know, any taxi dispatcher take a similar cut (30%) as them and their cost seems way higher (no automation at all, require people on phone, etc..). Theses loses are either because they are considered unlawful somewhere (I never heard of this issue with Lyft bu…

The difference is taxi companies are profitable (or at least break even) -- and by virtue of necessity. There's no nationwide taxi company. Each tends to be local to their municipality. As such they can't absorb big losses and aren't subsidized by VCs or public markets. Taxis charge more than the service costs to deliver, Lyft and Uber don't.

Lyft and Uber have higher cost basis than taxi companies because they don't leverage economies of scale of car ownership and insurance via shared fleet as taxis do. Then they also charge less to riders. There's also no guarantee people would continue to use Lyft or Uber if they raised their prices to above the cost to provide the service, particularly when that number is actually higher than a taxi.

To my knowledge, Uber has a -61% profit margin. You give them $10 and they spend $16 to provide you the service.

Re: Lyft Files S-1

#326

Post by arcticbull »

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.

SaaS companies are basically zero marginal cost businesses. Uber currently operates with a -61% margin. Their marginal costs substantially exceed their marginal revenues.

Re: Lyft Files S-1

#327

Post by petronio »

mcqueenjordan wrote: post #248
geezerjay wrote: post #72

Earlier quoted context omitted.

At this point isn't it cost-effective for Lyft to just build its own infrastructure?

Is there a strategic advantage for a shoemaker to make their own hammer?

There's a couple. Some samples:

* If the hammer manufacturer decides not to sell you any, you'll still have hammers.

* If the hammer manufacturer gains enough power to fix prices, you won't be paying them exorbitant prices.

* If the hammer manufacturer or their country gets embargoed and you're unable to legally purchase their hammers, you'll still have hammers.

All the above grant you a strategic advantage since you'll still have the necessary tools to continue your business while your competitors won't (or will have to pay much higher prices for their supply of hammers).

Re: Lyft Files S-1

#329

Post by sjg007 »

Alupis wrote: post #304
glass_of_water wrote: post #301

Earlier quoted context omitted.

But it's not like Lyft would suddenly have 350 full time engineers developing new features. A large chunk of those engineers would be working on building and maintaining infrastructure that AWS provides.

The point stands... 350 engineers is an army of engineers... for $8mm monthly, it wouldn't be unreasonable to achieve 500+ engineers depending on salaries. Lyft could definitely build and maintain their own infrastructure for this kind of money... probably do it better (customized to their needs) and cheaper.

Probably they will do a lot of optimization once they go public. That will improve financials over a year which will help the stock unless it comes at the expense of growth. The name of the game is growth that’s what gets you the high multiples.

Re: Lyft Files S-1

#330

Post by stefan_ »

diminoten wrote: post #216
qxi wrote: post #188

Earlier quoted context omitted.

Why not employ an hybrid architecture of bare metal for base load augmented by cloud-based infrastructure for peaks, constructed via a polyglot union of taped-together tools and lubricated by the daily tears of a hundred college hires only to regret it after the engineers who designed it have successfully used it as a springboard for promotion and departed with their accumulated arcane knowledge (and vested shares) f…

Oh come on, you know the performance profile of a streaming service is wildly different from a mobile ridesharing app... Their surges are nothing like yours.

Well, yeah, I would expect a mobile ridesharing app to have many many many order of magnitudes less server infrastructure than a streaming service.

It feels like you could fit half a Lyft into live low-latency transcoding and redistribution of just the top 10 streamers feeds on Twitch.

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