Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Lyft’s revenues double, losses quintuple and prospects darken

economist.com

Post reply on HN
Print view View original

11–20 of 257 posts

Re: Lyft’s revenues double, losses quintuple and prospects darken

#11

Post by SilasX »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

That would only be true if their unit profits were low or negative. On each ride they make a lot of money. They lose money because of their huge, ride-count-independent fixed costs, like legal defense and marketing. So it's not necessarily true that giving the riders a larger cut would widen the loss, if it came with a scale-back on all the marketing.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#12

Post by maxxxxx »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

The drivers want to make enough money so working for Lyft makes sense. It’s pretty simple.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#13

Post by marcinzm »

jmull wrote: post #3

"...and prospects darken" It doesn't actually sound like that from the body of the article. I have no idea if this is true or not, but the story says most of the $1.14B loss was due to booking employee stock based compensation of $894M. I'm assuming that's come out of the IPO and is not a recurring cost. With revenues of $776M, which perhaps are mostly recurring, doesn't that seem to bode well for the future? Of cour…

>With revenues of $776M, which perhaps are mostly recurring, doesn't that seem to bode well for the future?

Isn't the majority of that going to drivers which gives them a lot less room to maneuver financially?

Re: Lyft’s revenues double, losses quintuple and prospects darken

#14

Post by piker »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

The effect of the strike on profitability must be offset somewhat by an increase in revenues due to surge pricing.

[Edit: Is that incorrect? Why would this be down-voted.]

Re: Lyft’s revenues double, losses quintuple and prospects darken

#15

Post by SilasX »

olivermarks wrote: post #5

I previously submitted 'Uber’s enormous, vague IPO prospectus is an outrage (ft.com)' Well worth reading and quite ominous in light of Lyft performance IMO https://www.ft.com/content/60ab80e2-6a8b-11e9-9ff9-8c855179f...

From the summary in the child twitter link:

>We hope in the future there will be driverless cars and that we can then make money because no drivers but other people are developing them too.

Nice! It's common to think that self-driving cars will be Uber's salvation, but even then, they'll have to come with other SDC providers, so there's no moat. They'd have lower costs, but so would everyone else, and so they'd have to cut fares proportionally.

In theory, they can have such a lead time on a workable SDC that they get a great moat until everyone catches up. But that would be ~2 years at the absurdly optimistic end; not enough to pay back the costs of the program and throw off the huge returns investors demand. And in reality, Uber is lagging on this.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#16

Post by ducktypegoose »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

The CEO is blaming the operational loss on the stock compensation of employees. My assumption is the generous compensation pretains primarily to the corporate Langoliers, but doesn't include people who, you know, work for a living. Your reasoning that compensating drivers fairly would be a significant overhead to the profitablity of the company has been refuted by the company's own statements. My suspicion is the company could likely compensate drivers fairly, cut executive bonuses, and operate in the black. But that isn't what the people who operate the company at the highest level want, they want nothing but to get theirs, screw what anybody else wants. Capitalist incentives, man. And it seems like you've got some kind of animosity towards fair compensation of the drivers because they work, "gigs". Call it what you want, while they're on the clock work is work and they are as entitled to fair compensation as anyone else.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#17

Post by Spooky23 »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

Drivers are independent agents who have every right to demand better conditions. It’s especially important to chisel every penny out of a company that will likely vanish in a short number of years.

Lyft has bled money from day 1, so justifying stiffing the workers on the basis of accelerating losses isn’t logical at all.

Now that the investors have cashed in, perhaps they can double down on patents on robo-cabs and stop bleeding money on tech that will probably arrive too late to save them.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#18

Post by wsc981 »

wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

Makes one wonder how Grab compares, which is popular in Asia. I believe most Grab drivers in Thailand most likely earn an above average wage. For example a short drive from Chiang Mai central bus station to Chiang Mai airport cost me 208 Baht (~7 USD) while the average Thai daily wage is probably around 300 Baht. I also paid a tip (240 Baht total).

Of course Grab gets a share of the income, but I’d guess it’s less than or equal to 30%.

I few of those trips a day should be decent income to the average Thai.

Re: Lyft’s revenues double, losses quintuple and prospects darken

#19

Post by brentm »

chollida1 wrote: post #4

When Lyft was doing their road show there were a few analysts who had price targets of $45 as Lyfts fair value at IPO with an acknowledgement that the amount of shares available would double, and possibly triple when all shares were off restriction, meaning that the $45 price target was a best case and we would probably see far lower once people can sell. This is a company that has maybe 33 million shares outstanding…

Contributing in a big way to the short interest (according to Bloomberg[0]) is a single trade meant to hedge Soros $550m position purchased off of Ichan just before the IPO.

[0] https://www.bloomberg.com/opinion/articles/2019-05-07/lyft-s...

Re: Lyft’s revenues double, losses quintuple and prospects darken

#20

Post by beachwood23 »

SilasX wrote: post #11
wonderwonder wrote: post #9

Very interesting process going on right now with Lyft & Uber both losing money and some of their drivers trying to stage protests and strikes. The drivers appear to rely on the company as their primary source of income and want more money yet at the same time the companies are operating at a loss. Were they to increase wages (as % of every ride) it stands to reason the losses would widen. If they get to wide the comp…

That would only be true if their unit profits were low or negative. On each ride they make a lot of money. They lose money because of their huge, ride-count-independent fixed costs, like legal defense and marketing. So it's not necessarily true that giving the riders a larger cut would widen the loss, if it came with a scale-back on all the marketing.

I have the understanding that they actually lose ~$1 per ride.
Post reply on HN