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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

#141

Post by vpribish »

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?

Ask your broker or see what pops up when you preview a short sale order. Fidelity will show you an interest rate if it's a hard-to-borrow stock. Interactive Brokers is quite good about showing rates as well.

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

#142

Post by erikpukinskis »

mimixco wrote: post #23
SilasX wrote: post #15

Earlier quoted context omitted.

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.

> neither company has the tech experience to build one

They have the experience to distribute software to millions of devices on a regular basis and run a logistics platform and a consumer app.

That's something automakers will struggle to do.

Automakers can build cars.

That's something Über will struggle to do.

Seems like a fairly straightforward partnership to me. There are many automakers and most of them (anything vaguely in the budget category) will be struggling mightily if robotaxis ever work.

Mightily struggling automakers like to make deals where they get to make autos.

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

#143

Post by SilasX »

guntars wrote: post #77
SilasX wrote: post #22

Earlier quoted context omitted.

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.

>You’re forgetting the cost to develop the software itself

No, I'm (correctly) excluding it from the list of things they have to pay for to provide one more ride.

>It’s like saying a gigabyte of data on a wireless carrier cost them pennies in electricity and bandwidth.

It's more like:

Verizon is unprofitable.

People keep repeating the claim that, "lol, Verizon mobile actually loses money for every byte of data they transmit to you."

I reply that, "No, Verizon loses money in the aggregate. The cost of sending one more byte of data, on average, is less than they charge for it, but not by enough to cover their fixed costs."

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

#144

Post by gradys »

username223 wrote: post #108
Invictus0 wrote: post #30

Earlier quoted context omitted.

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 de…

> They could always find more money by charging higher fares...

It's not clear that they'd actually end up with more money as a company or more money for drivers this way. I'd expect they could pay many fewer drivers somewhat more, but total payments to drivers would be much less.

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

#145

Post by village-idiot »

OliverJones wrote: post #76

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 gy…

I only see two ways:

The most discussed is the hope of autonomous vehicles. It seems that predictions about the imminent arrival of autonomous cars were a wee bit optimistic, so that makes this plan dicey. Furthermore I don’t see any evidence that Lyft was pursuing their own autonomous cars, meaning that they were in extreme risk should Uber or Google succeed.

The other plan might be to gain total market dominance and then raise prices. I personally suspect that this plan would either trigger a regulatory response, or is exposed to the risk of someone doing to Uber what Uber did to the yellow cabs.

For my part, these ride sharing services appear to be quite similar to a public transit system, only for car obsessed America. And one thing we do know from public transit is that it is very hard to run them at a profit, which makes me doubt the ability of any ride sharing company to ever be profitable.

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

#146

Post by mimixco »

mimixco wrote: post #23
SilasX wrote: post #15

Earlier quoted context omitted.

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.

Downvoting this doesn't make it any less true. Sorry, Uber shills on HN. You can be in denial as long as you like and it doesn't change anything.

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

#147

Post by jjeaff »

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…

While I think real estate agents get too much when it come to higher dollar properties, it doesn't compare well to Ubers service. A lot of Ubers cost is fixed, there is almost no marginal cost for each ride.

A RE agent has to put in significant work for each commission they earn.

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

#148

Post by mimixco »

erikpukinskis wrote: post #142
mimixco wrote: post #23

Earlier quoted context omitted.

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.

> neither company has the tech experience to build one They have the experience to distribute software to millions of devices on a regular basis and run a logistics platform and a consumer app. That's something automakers will struggle to do. Automakers can build cars. That's something Über will struggle to do. Seems like a fairly straightforward partnership to me. There are many automakers and most of them (anything…

The tech to distribute an app? You mean Google Play, lol? A teenager can get an app in there.

Uber can't afford to run a national taxi service at scale for the same reasons no one else has ever done so. The economics of a taxi fleet don't scale to that size. Owning their own autonomous vehicles would only further erode their non-existent business model.

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

#149

Post by justinv »

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…

While they have 27 million shares short, you may want to look at Levine's take today on that - not all the shares are actually available due to hedging exposure. The 27MM is on top of the 33MM, not out of them.

Levine: "Here’s a pretty good statistic about Lyft Inc.:

Short interest in the No. 2 ride-hailing company has risen to 27 million shares, according to financial analytics firm S3 Partners, while Lyft’s public float is about 33 million shares in total.

Lyft has 285.9 million shares of stock outstanding (including regular Class A and high-vote Class B stock), but a big chunk of those are held by insiders and early investors who have agreed not to sell them for six months. Lyft only sold 32.5 million shares when it went public at the end of March. But now there are, apparently, some 60 million shares publicly available: 32.5 million from Lyft, and 27 million from short sellers. Short sellers have basically doubled the supply of Lyft stock. If you own a share of Lyft, there’s about even odds that you bought it from (someone who bought it from (etc.)) the company as part of its fundraising efforts, or from a short seller as part of her bet against Lyft.

Or, not necessarily her bet against Lyft. One thing that seems to be happening with Lyft is that some number of its pre-IPO shareholders have somehow managed to hedge their exposure, despite the lockups. The banks that are helping them hedge have shorted the stock. This means that some of the shares that are now publicly available are sort of phantom emanations of shares that aren’t yet publicly available; they are locked-up shares that have nonetheless been sold short. They are not new shares created by short selling, but shares that will be available in the future and that have been moved forward in time by short selling.

People always believe that there is some natural limit on the number of short sales, by the way, but there really isn’t. If there are 32.5 million free-floating shares of Lyft, then some enterprising short seller can borrow all of them and sell them to other people. But now those other people own 32.5 million shares of Lyft, and they can further lend them to another (or the same) short seller, who can sell them to yet other people, who will now own shares and be able to lend them, etc. This tends to peter out—some holders won’t lend the stock—but there is no physical requirement that it will. If enough people really wanted to short Lyft stock, and enough people really wanted to buy it, and also enough people wanted to lend it, then there could be 270 million short shares instead of 27 million. The stock market is not just a mechanism for financing companies and allocating their ownership; it is also a mechanism for betting on them. The financing and ownership things are limited by the actual size of the company, but the bets are not; they are limited only by the demand for betting."[0]

[0]https://www.bloomberg.com/opinion/articles/2019-05-10/the-un...

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

#150

Post by return1 »

jartelt wrote: post #124
swarnie_ wrote: post #31

Earlier quoted context omitted.

As soon as one of them increase prices to generate profit ill just move on to the next ride sharing app, then the next, then the next. You'd need a price fixing scheme worthy of British Airways make this work.

How do Delta, United, American Airlines, and Southwest all operate within the same market and not have fare wars constantly leading to bankruptcy? If you were correct, it seems like it would be impossible for several airlines to operate within the US. Yet, several airlines somehow manage to set prices that allow them to operate. I'm not saying Lyft and Uber will ultimately be successful (I don't know), but it wouldn'…

sounds like what taxicab companies have been doing for centuries.the question is what growth prospects uber has in a market that is already saturated and fighting for the bottom line, as there is little barrier for a new entrant.
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