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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

#191

Post by LifeofPi314 »

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…

I think in this market this is an opportunity of a lifetime to buy at these levels.

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

#192

Post by prewett »

malandrew wrote: post #184
britch wrote: post #91

Earlier quoted context omitted.

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?

Minimum wage after all expenses (including depreciation) are subtracted seems like the absolute lowest wage that could be considered "fair". Or maybe whatever McDonald's/Walmart are paying in your area, since that is sometimes higher than minimum wage in urban markets.

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

#193

Post by Spooky23 »

ummonk wrote: post #48
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?

Well restaurants do stiff the waitstaff by paying them less than minimum wage, but that doesn’t really apply here. Only would apply to Instacart.

No. If they do that they are breaking the law.

Minimum wage is the floor. If tips don’t bring your cash wage up to minimum, the employee has to get paid.

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

#194

Post by Spooky23 »

malandrew wrote: post #184
britch wrote: post #91

Earlier quoted context omitted.

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?

If I hire a guy to paint my house for $100, and the paint costs $105, but the painter paid for it already, that’s objectively unfair.

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

#195

Post by ProfessorLayton »

sytelus wrote: post #181
ivalm wrote: post #180

Earlier quoted context omitted.

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.

AAA cites 59¢/mile for an average sedan [1], further they cite the costs for average private insurance, which is inappropriate for running a commercial operation with uber/lyft.

Additionally the average occupancy for an uber/lyft is much higher than typical privately used cars. Adding hundreds of pounds of passenger weight for a shared ride will yield below average MPG on a typical car, making expenses above average.

[1] https://newsroom.aaa.com/tag/driving-cost-per-mile/

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

#196

Post by jonathankoren »

darkwizard42 wrote: post #190
jonathankoren wrote: post #66

Earlier quoted context omitted.

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 busi…

Thanks for the qualification about Eats. However, I don’t think the issue in food delivery is a technical. I think it’s financial.

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

#197

Post by snarf21 »

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…

The only thing that can happen is that they have to merge. They can share all the expensive infrastructure and no longer spend millions every month trying to gain/keep market share.

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

#198

Post by dd36 »

jartelt wrote: post #115
dd36 wrote: post #78

They just went public at $80b but are raising $8b, so per the chart in the article, quite a few recent investors are getting a haircut? Pre-money $72b valuation?

The investors from the last funding round paid about the same share price as the IPO price, so they haven't really made or lost any money. It certainly wasn't a good investment for them (0% return), but I don't think they have taken a haircut yet. It will ultimately depend on where the stock price goes.

What’s he hold period? 45 days? Seems like the $79b investor got a 10% haircut.

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

#199

Post by jbigelow76 »

vowelless wrote: post #137
baxtr wrote: post #100

Earlier quoted context omitted.

For me it’s really difficult to comprehend what you describe. I think it’s super interesting though. Is there any way you could tell the story for a layman?

Lyft seems to have a lot of shorting. People are heavily betting against it. They expect its price to drop. However, while it may be true that in the long term lyft will loose value, something weird can happen in the short term: Shorting requires borrowing shares. You pay a fee, borrow the share. If it looses value you make money. But if it gains value, and you are asked to return those shares back, you can loose a l…

Also, the act of asking for those shares back could raise the value, creating a negative feedback look. Disastrous for the short seller.

Why might we see lots of shorts being asked to return the shares back? Due to the large amount of shorting and the bank wanting those shares for other purposes.

That's very interesting, are there mechanisms that prevent large shareholders like hedgefunds or banks from loaning out shares and then purposely pulling them back to create the negative feedback loop you mentioned? It sounds like a situation open to abuse.

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

#200

Post by dpifke »

snarf21 wrote: post #197
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…

The only thing that can happen is that they have to merge. They can share all the expensive infrastructure and no longer spend millions every month trying to gain/keep market share.

They'd likely lose the "independent contractor" argument if drivers weren't able to work for both companies simultaneously. It's hard to say someone is an "employee" if they're logged into competitors' apps and taking rides from either, during the same shift.
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