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

71–80 of 257 posts

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

#71

Post by onlyrealcuzzo »

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 cannot understand why Uber needs 22k employees.

I get it that WhatsApp and StackOverflow and Instagram have/had a lot less legal, financial, and marketing requirements. But Uber has almost 1000 times the amount of employees WhatsApp, Instagram, and StackOverflow had when they reached similar scale.

I get it that there's a lot more analytics and geospatial complexity in Uber. I get it that they have to manage tens (hundreds?) of thousands of drivers.

It just seems like there's a LOT of unnecessary fat that could be cut.

Facebook only had 4k employees when they IPOed. Google had only 1,900!

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

#72

Post by jorts »

CPLX wrote: post #64
m_ke wrote: post #53

Earlier quoted context omitted.

I'm convinced that the end goal is being the last one standing. Either one of them failing would guarantee a monopoly for the other and make it easier to play with the margins.

> Either one of them failing would guarantee a monopoly for the other Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?

They exist and they're terrible (at least in SF) as taxis still aren't reliable to pick you up.

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

#73

Post by deevolution »

All these ride sharing companies are here to carry us seamlessly into the driverless future. Unless they're capable of pivoting to driverless technology they are mostly matching services for riders and drivers and Honestly, I dont think it should be uber or lyft's responsibility to build driverless technology - they should just focus on making the experience of getting a ride as excellent as possible. Leave driverless technology to other experts.

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

#74

Post by dd36 »

warp_factor wrote: post #27
brentm wrote: post #24

Earlier quoted context omitted.

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.

That’s not true. They do 12-month price targets based on fundamental financial analysis. It’s the short term that they’re not predicting.

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

#75

Post by hellllllllooo »

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…

> but this is a gig / 'work only when you want

This is not 'a work only when you want' job. People do it full time to feed their families and after doing it for years find it difficult to move to a different role for a variety of factors. I'm sure they would go get a better paying job elsewhere if it was easy.

It used to be a 40 hour job when they joined but Uber/Lyft have gradually reduced earnings. Now it's 60-70 hour a week job. That's the problem. The gig work/contractor aspect of Uber/Lyft is a smokescreen to avoid paying minimum wage. The drivers are doing it because they have to but the work conditions are pretty bad. Hence the strike.

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

#76

Post by OliverJones »

Fundamentals question: Can somebody explain how these ridesharing companies expect to turn a profit, eventually?

If you lose 50 cents on every ride, how do you make it up in volume? Every ride is subsidized by the Sand Hill Road crowd. They're a great deal. I took a 40-min ride yesterday for US$12.50 in a high-cost-of-living traffic-clogged city. How can that make sense? A ride in a sketchy 1970s-era New York City gypsy (no-medallion) cab would have cost more. And, without all the magic and overhead of some app.

Oh, I get it. They're going to scale up using autonomous vehicles. But, that's also a problem. Right now their business model relies on independent owner-drivers. In other words, from the front office's point of view, their fleets fuel, maintain, garage, and insure themselves. How's that going to work when they replace the drivers' cars with their own capital equipment?

Why should I invest for the long term in these companies?

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

#77

Post by guntars »

SilasX wrote: post #22
beachwood23 wrote: post #20

Earlier quoted context omitted.

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…

You’re forgetting the cost to develop the software itself. It’s like saying a gigabyte of data on a wireless carrier cost them pennies in electricity and bandwidth.

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

#79

Post by Domenic_S »

CPLX wrote: post #61
jahlove wrote: post #46

Earlier quoted context omitted.

doesn't the ride cost go down substantially if they ever get autonomous vehicles on the road? I believe that is the end goal.

In short, no. I read this in literally every HN discussion of ride sharing, but there's literally no reason to think that ride sharing companies will have any special role to play with autonomous vehicles if they materialize (which seems extremely doubtful in the short or medium term) and there's even less evidence that it will be cheaper. I still can't figure out why people don't realize that low income humans are c…

There are a ton of factors that make your DSLR to Autonomous Car comparison flawed.

The utilization rate of the camera is going to be far lower than the rate of the car. The camera may sit on a shelf for weeks before being rented for a single day, so the per-rental price must be relatively high. The market is small. Also, cameras are comparatively easy to break, and the technology goes out of date extremely quickly as compared to a car.

I think the greatest fiscal advantage to autonomous car fleets is the likely high utilization rate.

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

#80

Post by m_ke »

CPLX wrote: post #64
m_ke wrote: post #53

Earlier quoted context omitted.

I'm convinced that the end goal is being the last one standing. Either one of them failing would guarantee a monopoly for the other and make it easier to play with the margins.

> Either one of them failing would guarantee a monopoly for the other Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?

Because they'll be able to undercut any small competitor that attempts to enter one of their markets by subsidizing it with revenue from everywhere else.
Post reply on HN