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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

#161

Post by unreal37 »

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'…

Not sure if you're joking, but the airlines have a long long history of bankruptcy...

Even American Airlines declared bankruptcy in 2011 and emerged from it in 2013... Delta in 2005. United in 2002.

[0] http://airlines.org/dataset/u-s-bankruptcies-and-services-ce...

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

#162

Post by jjeaff »

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 (…

I can definitely understand 22k considering all the drivers to manage. And imagine how many employees you need to manage regulatory compliance in as many cities, counties, provinces, states, countries they have to deal with.

The more interesting figure to me would be how many of those 22k are developers.

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

#163

Post by mimixco »

bduerst wrote: post #35
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.

They're hoping you'll buy a self-driving car and then let them pay you a minimal fee to use it when you're not. The problem is that self-driving cars will change car ownership needs, and that there could be entirely different companies in the space when it does finally come around.

I doubt that people who have to sleep in their cars will be able to afford an autonomous vehicle.

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

#164

Post by CPLX »

m_ke wrote: post #127
CPLX wrote: post #96

Earlier quoted context omitted.

Not really. It’s a large market with almost no barrier to entry. Either they have huge margins or they don’t. If they do have large margins someone will come along and attack the most profitable segment of the business. That could be airport rides, or having extra cars outside the end of a sporting event, or whatever. As long as switching costs for customers are low then they can’t defend high margins. For monopoly t…

Supply is a barrier to entry. These 2 sided market places require having a large supply of drivers and riders to be viable. A new competitor would probably need to come in with a managed fleet and be ready to operate at a loss for a really long time. At their current scale uber and lyft don't need to have huge margins, they just need to break even and can make up for it with volume. Like amazon they could undercut an…

> These 2 sided market places require having a large supply of drivers and riders to be viable.

No, they don't. They could just hang out outside of big crowded events, like the end of a stadium concert, or rush hour at the airport. Or whatever the peak crunch point is for the existing service. It would be trivial to make at least some money doing only that.

Then the existing service sees its margins eroded. And so on.

There's just a ton of handwaving here, but there's no mechanism for a monopoly. Burden of proof would be on your side to demonstrate it. It's absolutely trivial for customers to switch, there's no way to lock them in. At least some people would do it literally to save $10 on a single ride to the airport. And you don't need a fleet to take one person to the airport. Or a couple. Or to strike a deal with one large company, or airline, or whatever.

Acquiring a monopoly is pointless if you can't defend it. And you can't unless you can constrict supply or lock in demand. Uber and Lyft can't and aren't ever going to be able to.

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

#165

Post by CPLX »

vlovich123 wrote: post #121
CPLX wrote: post #98

Earlier quoted context omitted.

> There are a ton of factors that make your DSLR to Autonomous Car comparison flawed. Indeed. The biggest one of course being that there’s no such thing as an autonomous car.

Snarky but inaccurate reply. They do if you're a resident of Phoenix. Prices are equivalent to Uber but it's still too early to conclude what's behind those prices. Are they sustainable at scale? Is it just to avoid having the price floor drop out from them if they're viewed as purely a discount option? Is it to dissuade having too many users on the system all at once?

The way you can tell if you're looking at a driverless car is to check and see if there's a driver in it.

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

#166

Post by mimixco »

erikpukinskis wrote: post #157
bduerst wrote: post #35

Earlier quoted context omitted.

They're hoping you'll buy a self-driving car and then let them pay you a minimal fee to use it when you're not. The problem is that self-driving cars will change car ownership needs, and that there could be entirely different companies in the space when it does finally come around.

I'm not sure I buy that scenario... Is there any other market where random consumers are basically acting as financiers for a commercial fleet of equipment? What's the reason for the fleet operator to involve those customer-owners at all? In terms of immediate cost, it will be cheaper as a customer just to use the ride sharing service yourself, since you won't have to pay car payments you'll just pay the rideshare fe…

Indeed. And surprisingly, no one[#] has brought up that there is no such thing as as a national (or even regional) taxi service. And why is that? It's because the economics of fleet ownership don't scale to that size. If they did, we'd have a single nationwide taxi service already. In 100 years of taxis, no one has done that.

[#] Except Hubert Horan who destroyed all their BS with his series, "Can Uber Ever Deliver?"

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

#167

Post by bduerst »

erikpukinskis wrote: post #157
bduerst wrote: post #35

Earlier quoted context omitted.

They're hoping you'll buy a self-driving car and then let them pay you a minimal fee to use it when you're not. The problem is that self-driving cars will change car ownership needs, and that there could be entirely different companies in the space when it does finally come around.

I'm not sure I buy that scenario... Is there any other market where random consumers are basically acting as financiers for a commercial fleet of equipment? What's the reason for the fleet operator to involve those customer-owners at all? In terms of immediate cost, it will be cheaper as a customer just to use the ride sharing service yourself, since you won't have to pay car payments you'll just pay the rideshare fe…

That's my point - autonomous car fleets will change car ownership habits. Increased inexpensive, on-demand transportation means less people buying cars, and the people who do end up buying won't want to share with strangers.

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

#168

Post by marcinzm »

jkubicek wrote: post #56

> Most of that was down to booking stock-based compensation plans for employees, who earned $894m from Lyft’s initial public offering Could someone help me understand what this means? Is this compensation above and beyond employee stock options? If not, that means employees own ~5% of Lyft, which is much less than I would expect. As an employee of a pre-IPO startup, I'd love to get a better handle on the realistic va…

Lyft had something like 10 rounds of funding. Assuming each one was for 15% stake the end result is that 80% of the company is owned by investors.

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

#169

Post by mimixco »

erikpukinskis wrote: post #159
mimixco wrote: post #148

Earlier quoted context omitted.

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.

No, I mean built the app, maintain it, build a relationship with users, get people to download it and tell their friends, all of that. > The economics of a [self driving] taxi fleet don't scale to that size. I'd be interested in hearing your analysis! I haven't heard that one. Tesla claims these vehicles will pay themselves off within two to three years once they can operate fully autonomously.

Hubert Horan has done an amazing teardown with his series, "Can Uber Ever Deliver?" But you don't need to be a transportation logistics expert (as he is) to see that there are no national or even regional cab companies. The reason is that, after a certain size, the business simply doesn't scale.

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

#170

Post by bduerst »

mimixco wrote: post #166
erikpukinskis wrote: post #157

Earlier quoted context omitted.

I'm not sure I buy that scenario... Is there any other market where random consumers are basically acting as financiers for a commercial fleet of equipment? What's the reason for the fleet operator to involve those customer-owners at all? In terms of immediate cost, it will be cheaper as a customer just to use the ride sharing service yourself, since you won't have to pay car payments you'll just pay the rideshare fe…

Indeed. And surprisingly, no one[#] has brought up that there is no such thing as as a national (or even regional) taxi service. And why is that? It's because the economics of fleet ownership don't scale to that size. If they did, we'd have a single nationwide taxi service already. In 100 years of taxis, no one has done that. [#] Except Hubert Horan who destroyed all their BS with his series, "Can Uber Ever Deliver?"

The reason there isn't a national chain is because municipal laws fragment the market. You can typically schedule a cab for pickup in rural America (I've done it before), it is just expensive because you're also paying for a person's time to drive out there and back.
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