Lyft’s revenues double, losses quintuple and prospects darken • Hacker News Board

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

#181

Post by sytelus » Fri, May 10, 2019, 5:55 PM UTC

ivalm wrote: post #180

sytelus wrote: post #128

Earlier quoted context omitted.

This is what gets lost in all the negativity. Lyft/Uber can slash their R&D by 90% and they wouldn't have much trouble running normal operations as minimal app-based cab companies. At 2,000 minimally required head count for running operations, they would probably average $2B in annual expenses. However suddenly they would be gloriously profitable with huge scalable upside and small fixed costs. Here are some calculat…

This is a bad estimate for the cost per mile. Average depreciation cost per mile driven is ~ $0.6 [0]. Commercial insurance is ~ $0.2 Cost of gas per mile (in CA at 20 mpg, since most cars are non-hybrid) ~ $0.2 So cost of driving per mile is ~$1 to the driver So really driver makes ~$15/hour when it is busy, less most of the time [0] - https://newsroom.aaa.com/tag/driving-cost-per-mile/

The cost of per mile was from AAA.

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

#182

Post by Spooky23 » Fri, May 10, 2019, 6:02 PM UTC

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?

Waitstaff are employees, and aren't providing the chairs and plates. A waiter gets his ass in the restaurant and does stuff. That's it. Totally different situation.

Drivers are subcontractors, and if they are looking at striking, that's a signal that their pay isn't sufficient. Ride sharing providers encourage their contractors to perform accept tasks in a way that resembles full-time employment, but the message they recruit with is that "you're making extra money with your car, which is "free"". It's a bad deal because they pay $0.85/mi, and operating the car costs around $0.58/mi (which is a lowball estimate for livery use, and $0.23 of that is depreciation). When you factor in additional wear and tear, brakes, etc, full time drivers probably have another $0.10 of expense.

It's inherently exploitive, as Lyft subcontractors are working for cashflow and operating at a loss.

Where the money comes from is Lyft's problem. They can cut operational overhead, raise prices, reduce R&D science projects, take measures to eliminate unprofitable routes, etc. The usual reply is "robot cars are coming and this goes away"! That's not really right either -- there are no sentient robots driving around looking to be exploited, so they will need to own or lease those assets, which will depreciate at something like $0.50-0.75/mi (your robot cab isn't going to be cheap), and they will need to manage, insure and maintain the assets, which isn't cheap either.

Congrats to the folks who cash out. As amazing as ridesharing is, it's a fucked business.

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

#183

Post by SilasX » Fri, May 10, 2019, 6:04 PM UTC

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?"

Yeah, but arguably smartphone technology reduced admin costs and raised the size of the economically optimal taxi provider. That has been around for less than a hundred years.

Edit: Dangit, I thought my reply got eaten, but I was looking at a different branch. See the rephrasing here: https://news.ycombinator.com/item?id=19880565

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

#184

Post by malandrew » Fri, May 10, 2019, 6:05 PM UTC

britch wrote: post #91

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?

It's possible to pay out an unfairly low wage with money you don't have. I'm not saying that's the case with Lyft, but just because you're operating at a loss doesn't mean you're paying people fairly for their work.

Define unfair. How can we objectively determine what would be a fair wage for that work?

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

#185

Post by darkwizard42 » Fri, May 10, 2019, 6:06 PM UTC

jmull wrote: post #3

"...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…

Yes... this article's headline is absolutely off. The massive one-time compensation from IPO was unavoidable. Outside of that Lyft is now losing LESS money than it was before, beat on Passenger Growth AND beat on $/passenger. Overall, a good quarter but definitely still losing a LOT of money.

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

#186

Post by darkwizard42 » Fri, May 10, 2019, 6:08 PM UTC

jkubicek wrote: post #86

jkubicek wrote: post #81

Earlier quoted context omitted.

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.

To clarify, I think I have a good sense of the dilution I should expect, but there's always stories about someone working for years, expecting a big payout after IPO, and ending up with $20k.

When this happens it means that the investments that were made did NOT increase the value of the company. What you want are rounds that increase the value of the company beyond the initial valuation at which it was invested (aka growth)

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

#187

Post by SilasX » Fri, May 10, 2019, 6:09 PM UTC

mimixco wrote: post #169

erikpukinskis wrote: post #159

Earlier quoted context omitted.

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.

Arguably, smartphones, apps, and usage of the drivers' own cars have together reduced the administration costs, and thus raised the scale at which a provider can profitably operate. That interplay of factors hasn't been around for 100 years.

Although I've often speculated if you could have had an Uber-like service in the 80s, where you register with your credit card on file, and then call a number with a location to get an estimate pickup, and then they page a driver to get you, perhaps with an authentication code.

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

#188

Post by whoisjuan » Fri, May 10, 2019, 6:10 PM UTC

jonathankoren wrote: post #66

whoisjuan wrote: post #8

The problem with Lyft is that they are in a poorly understood market, in second place and burning cash at neck-breaking speed. Even if they manage to start making progress towards profitability, they might need more than that. The reality is that ride-sharing probably needs another lustrum or so to solidify and that seems excessively long for Lyft in its current state. Uber faces the same challenges but its way more…

Uber’s multiple markets maybe an advantage. If they’re all equally unprofitable, perhaps not, but at least that’s plausible. Uber’s multiple verticals are dogs, and reek of money madness. Eats is small time and loses money. I don’t know it’s financials, but I find it hard that this ancillary business is in a healthier state than a competitor who has it as their core buisness. Uber ATG is as bad off as any other auton…

This is very true. Their diversification it's not necessarily a good diversification. I think only Uber Eats has the potential to produce some positive result in the mid-term, but it also depends on how much they decide ton invest on it.

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

#189

Post by LifeofPi314 » Fri, May 10, 2019, 6:11 PM UTC

chollida1 wrote: post #174

LifeofPi314 wrote: post #171

Earlier quoted context omitted.

finviz mentions, the short float to be 7% and Short ratio is 1.05 which says it's much conservative than the numbers posted. How to explain the difference?

Lyft's float can be viewed one of two ways 1) Total Shares of 273Million this is what finviz is using. This includes locked up shares that can't trade right now 2) the Currently tradable float, this is 32 Million and what I, Bloomberg, Markit, and any non budget site will use as these are the only shares that currently matter.

Makes sense. Thanks!

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

#190

Post by darkwizard42 » Fri, May 10, 2019, 6:12 PM UTC

jonathankoren wrote: post #66

whoisjuan wrote: post #8

The problem with Lyft is that they are in a poorly understood market, in second place and burning cash at neck-breaking speed. Even if they manage to start making progress towards profitability, they might need more than that. The reality is that ride-sharing probably needs another lustrum or so to solidify and that seems excessively long for Lyft in its current state. Uber faces the same challenges but its way more…

Uber’s multiple markets maybe an advantage. If they’re all equally unprofitable, perhaps not, but at least that’s plausible. Uber’s multiple verticals are dogs, and reek of money madness. Eats is small time and loses money. I don’t know it’s financials, but I find it hard that this ancillary business is in a healthier state than a competitor who has it as their core buisness. Uber ATG is as bad off as any other auton…

Uber Eats is making money... the financials are clearly listed in its S-1, https://www.sec.gov/Archives/edgar/data/1543151/000119312519...

Uber Eats is currently 2nd/3rd place in market share for food delivery at around 20%, https://qz.com/1549084/doordash-overtook-uber-eats-in-us-onl...

There is a lot more out there on Eats financials as listed in the S-1 and in previous "leaks". Definitely seems like a healthy business where I agree its revenue is much smaller than the overall ride-sharing business, but from a technology standpoint they are likely better than their competitors BECAUSE of having a core ride-sharing business with which it overlaps a lot of ideas like pricing, dispatch, ETA predictions.