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Lyft’s revenues double, losses quintuple and prospects darken

economist.com

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

#101

Post by GCA10 »

onlyrealcuzzo wrote: post #71
SilasX wrote: post #11

Earlier 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 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 (…

Uber has a huge community operations team that's in charge of making sure that its drivers stay productive and at least semi-at-peace with the way the system works (and evolves!) There's a lot more human-to-human work needed in this business than for a social-media site, or an automated online-ad service.

That's where a lot of the 22,000 employees are, and if Uber could thrive without them, it surely would have already done so. Among the tasks I see listed in a current Uber job ad:

--Walk driver-partners through the onboarding process and all of the tools they need to be successful on the Uber platform

-- Help existing driver-partners troubleshoot any issues they experience (i.e. a delayed payment)

-- Help brand the Uber name and get driver-partners excited to be on the road

-- Assist with events and promotions as needed (occasionally off-site, during off-hours or weekends)

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

#102

Post by erikpukinskis »

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…

> low income humans are cheap

This is far too broad a statement to possibly be true. It really depends on the situation.

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

#103

Post by razwall »

jkubicek wrote: post #81
nytesky wrote: post #67

Earlier quoted context omitted.

0. It’s a lottery ticket. To be realistic. Esp with the DOW down 300 today.

Yeah, I've always considered it a lottery ticket, but I'd love to get a sense of whether I'm holding a $10k or $10mm lottery ticket. FWIW, I've done the math based on my percentage ownership, expected valuations, timeline to IPO, etc. The big unknown for me is dilution. I don't yet have a good sense of how much dilution I should expect as we move through rounds of funding into an IPO.

Dilution is a red herring. It doesn't change the value of your shares (theoretically). What will matter is how the company spends the funds that it raises, and whether it does so in a way that generates a positive or negative return on investment.

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

#104

Post by jethro_tell »

GCA10 wrote: post #87
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…

Right now, Uber keeps 22 cents on each dollar paid by passengers, as its fee for creating the app, keeping it working, etc. That's cheap relative to the iTunes store, which keeps 30%. It's preposterous compared to the 3% that real-estate agents get for buying or selling a home. We really don't know what the "fair" rate is for running a ride-hailing business. We know what's been collected to date in a venture-funded d…

Autonomous cars and owning their fleet or leasing from large fleet companies is probably the end goal for increasing the share. I don't see this going any other way. These have always been a play on getting market share at a loss while the tech is being built and converting to a profitable position when there are no contractors to pay.

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

#105

Post by PretzelFisch »

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…

What if the company raised rates on rides?

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

#106

Post by goobynight »

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 would either need funded or the founders would have to bring in a lot of cash.

Driver acquisition isn't cheap.

Then there's the question of which city you start in. The mega corp could probably just cut prices in that city until you give up.

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

#107

Post by HoyaSaxa »

LifeofPi314 wrote: post #34
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…

Could you please tell me how do you find out what the borrow rates are for short shares and how many are being shorted?

Short interest is really an irrelevant number. That number could be largely skewed by derivatives, corporate actions, etc. Additionally, foreign brokers do not have to report short interest to the SEC.

In regards to borrow rates, there are some sources that are fairly accurate, but usually only to prime brokers themselves. There is no public exchange.

Interactive Brokers is the only retail broker that I know of that is fairly transparent and fair in terms of borrow rates.

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

#108

Post by username223 »

Invictus0 wrote: post #30
Spooky23 wrote: post #17

Earlier quoted context omitted.

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?

> How can you say that Lyft is "stiffing" the drivers when they lose money on every ride?

That's Lyft's problem, not the drivers'. They could always find more money by charging higher fares and maintaining a fleet of identical cars for drivers to rent, but then they'd just be a taxi company, not a "tech platform." If they want to keep offering VC-subsidized rides, that's fine by me. And when they run out, they can decide whether they want to stiff their drivers even more, or raise their fares.

And yes, the American tipping system needs to die.

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

#109

Post by [deleted] »

dd36 wrote: post #74
warp_factor wrote: post #27

Earlier quoted context omitted.

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.

[deleted]

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

#110

Post by neffy »

brentm wrote: post #51
LifeofPi314 wrote: post #34

Earlier quoted context omitted.

Could you please tell me how do you find out what the borrow rates are for short shares and how many are being shorted?

Nasdaq site has information every 15 days or so: https://www.nasdaq.com/symbol/lyft/short-interest

The price dynamics of this are interesting, and a bit counter-intuitive, since selling the share short also puts short term pressure on the share downwards (at the sale price), especially if there´s a lot of shorting. Its because of this, and also because due to monetary expansion there is a positive long term bias in share prices, that short selling isn´t quite as simple as sometimes presented.

As pointed out above, if there is then a subsequent increase in price, and this can be because short sellers are forced to buy back their short for any reason (short squeeze), prices can very quickly increase out of control. The best case of this was the Porsche-Volkswagon "infinity squeeze" - when mathematically speaking, absent intervention, the price would have gone to infinity.

https://moxreports.com/vw-infinity-squeeze/

Good times.

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