Uber and lyft look like a charity set up by VCs to provide people with cheaper transportation. Who knows what will happen once they increase fares as they promise to investors
Lyft’s revenues double, losses quintuple and prospects darken
21–30 of 257 posts
Re: Lyft’s revenues double, losses quintuple and prospects darken
#22Earlier quoted context omitted.
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.
That figure comes from taking total losses and dividing by the number of rides. It's not the same as saying that the costs of providing the ride itself are $1 more than they charge for the ride. (The fixed vs variable distinction I was making above.)
Uber's costs of providing a specific ride are: Driver's cut, maps licensing, cloud charges, data transfer. That is rarely more than the cost of the ride. Remember, Lyft took flack for the outrageously high 14 cents a ride in cloud costs.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#23I 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…
The self driving car idea won't help Uber or Lyft for two reasons. First, neither company has the tech experience to build one. Second, and more importantly, both companies would have to buy and maintain the cars which isn't financially viable.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#24"...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…
Most analysts are positive on company, media and market not so much. I think I'd bet on the analysts being right.
I think eventually for Lyft & Uber prices will creep up, discounts & marketing decrease and plenty of money will be made on a small spread.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#25It's fun watching these "smart" economists trying to tell you what's going to happen, with Lyft and with the upcoming Uber. The reality is that many people will feel they're able to "beat the market", and they will try to get a chunk of the glory, mostly losing in the effort.
Indeed. A few at the top will get rich from both companies with lots of regular middle-income folks taking the fall. Reminds me of Enron.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#26When 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...
My understanding of that Soros trade is that it was not an actual short (the product was not public), but it was a synthetic product that was correlated on the Lyft ticker, that probably behaved like a Short but wasn't a short.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#27"...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…
Most analysts are positive on company, media and market not so much. I think I'd bet on the analysts being right. I think eventually for Lyft & Uber prices will creep up, discounts & marketing decrease and plenty of money will be made on a small spread.
Analysts predict where the stock is going in the short term based on "sentiments" and "emotion". I wouldn't bet anything on them.
Re: Lyft’s revenues double, losses quintuple and prospects darken
#28Very 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 th…
Presuambly you have to buy and maintain a half decent car to enter that market, which is difficult if you have the financial resources of someone earning 300 baht a day. And with rather less capital outlay you can also earn 200 baht from short tuk tuk rides for tourists...
Re: Lyft’s revenues double, losses quintuple and prospects darken
#29Earlier quoted context omitted.
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...
My understanding of that Soros trade is that it was not an actual short (the product was not public), but it was a synthetic product that was correlated on the Lyft ticker, that probably behaved like a Short but wasn't a short.
It's still a short. The banks who sold the trade to soros still need to hedge their exposure by shorting the stock. The short position still gets reflected, if anything it probably amplifies the effect since it's created from a derivative
Re: Lyft’s revenues double, losses quintuple and prospects darken
#30Very 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 s…
How can you say that Lyft is "stiffing" the drivers when they lose money on every ride? Where is the extra money for the drivers supposed to come from? Every passenger has the opportunity to tip if they want: would you also say that restauranteurs are stiffing the waitstaff?